Early Indicators: Record 6-Month Increase in Temp Workers; 19-Month High for Mfg. Overtime Hours
From today's BLS employment report:
1) Manufacturing overtime hours increased slightly to 3.7 hours in March, reaching the highest level since August 2008 (see graph). Except for 0.10 hour decline in February, overtime hours have increased or stayed the same for each of the last 12 months. Compared to the low last March of 2.6 hours, overtime has increase by more than a full hour to 3.7 hours in March, which is 42 percent increase.
2) The number of temporary help workers increased in March by 40,200 to 2,037,000 employees, the highest level since December 2008 (see graph above). The March increase follows similar recent monthly increases of 49,200 in January and 36,700 in February. Temporary workers increased in March for the sixth straight month, following 23 straight months of declines, and it marks the first time since 2005 of six consecutive monthly increases.
The 312,600 increase in temporary jobs since the September-low is the largest 6-month increase since this data series started in 1990.
3) Nonfarm payrolls increased by 162,000 in March, the largest monthly gain in three years - since March 2007, although about one-third of those jobs were temporary Census jobs.
Bottom Line: Both the surge in temporary workers and the increase in overtime hours are early indicators of a broader recovery in the labor market, and signal future increases in job creation. In the early stages of economic recovery, it makes sense for cautious employers to both increase temporary hiring and increase overtime hours of existing workers. As the economy stabilizes and expands and employers become more confident there will be broader hiring for permanent workers.