Aug 01, 2014

DCR National Temp Wage Index – August 2014

National temp wage index - August 2014

In June 2014, employment in professional and business services rose by 67,000, averaging 53,000 new jobs per month over the past 12 months. Management and technical consulting services had an increase of 8,000 jobs, while architectural and engineering services as well as computer systems design and related services increased by 7,000 jobs each. Employment continues to trend upwards for temporary help services.

Leading American companies such as Wal-Mart, General Motors, and PepsiCo are increasingly engaging temporary workers, freelancers, contract workers, and consultants. The Associated Press reports that these workers number nearly 17 million, which is about 12 percent of everyone with a job.

According to Sean Montgomery, co-founder and CFO of Integrity Staffing Solutions, the staffing industry is expected to grow nationally 6 percent in 2014 and an additional 7 percent in 2015.  A May 2014 survey of 37 economists found that three-quarters of them believe that the increased use of temps and contract workers represents a long-term trend.

While the U.S. economy has 2.4 million fewer jobs than five years ago, temp hiring has accelerated. Temp jobs make up at least 20 percent of the jobs gained since the recession ended.  The CareerBuilder Midyear Job Forecast found that 33 percent of hiring managers plan to hire temporary or contract staff in the second half of 2014.

June 2014 Employment Recap

U.S. employment was robust in June 2014, with employers adding 288,000 in non-farm employment, according to the Labor Department. The unemployment rate fell to 6.1 percent, the lowest level since September 2008.  Job creation has now grown by more than 200,000 jobs in each of the last five months, a stretch unseen since the technology boom in the late 1990s. Over the past 12 months, the economy has added almost 2.5 million jobs, the fastest year-over-year pace since 2006.

U.S. Private Jobs Gains & Losses

U.S. Private Jobs Gains & Losses

Source: BLS

The growth in jobs was spread across all industries. Service sector employment increased by 236,000, its largest gain since October 2012, while manufacturing employment had its 11th straight monthly rise with 16,000 jobs added. Retailers added 402,000 workers, and financial and insurance firms increased payrolls by 17,000. According to Tara Sinclair, an economics professor at George Washington University, the diversity of jobs added is a signal for a stronger recovery than has been seen in recent months.

The length of the average workweek remained high at 34.5 hours, and total hours worked increased by 0.2 percent. The Conference Board’s report on online job ads revealed that the U.S. online job ads rose by 155,900 in June to a total of approximately 5.1 million. Employer demand for higher-paying professional jobs has dropped, while ads increased for lower-paying jobs such as transportation workers, office support, construction, and production workers.

 Employment vs. Labor Demand

Employment vs. Labor Demand

Source: The Conference Board, BLS

“It’s a strong report, there is no question about it. The labor market is improving at a seemingly stronger rate than before, the slack is being absorbed, we are chipping away.” ~Josh Feinman, Chief Global Economist at Deutshe Asset & Wealth Management

However, despite the robust employment figures, wages have yet to rise significantly. Average pay has grown only 2 percent a year during post-recession recovery. Analysts believe that eventually the falling unemployment rate will lead to pay increases.

“There’s been a generational shift toward a less committed relationship between the firm and the worker.” ~Ethan Harris, Global Economist at Bank of America Merrill Lynch