Staffing Index Points To Continued Employment Growth

The American Staffing Association reported their weekly ASA (Temp) Staffing Index at 97. The 2013 data is represented as a BLUE-PURPLE line in the chart below. The equivalent value 1yr ago (2012-ORANGE LINE) was 92 with 2013’s values mostly tracking decently above 2012 and just below 2007 (the GREEN LINE).

As an indicator of future trends in the Establishment and Household (Employment) Surveys, the ASA Staffing Index has provided ~6mos preview of our future employment direction. This latest reading indicates that the employment surveys 6mos ahead should be higher. Higher employment means greater future Retail Sales including Light Weight Vehicle Sales (Autos and Lt Trucks) and higher New Single-Family Home Sales.

The ASA Staffing Index is one of several indicators which provide useful insight to general economic trends. The current uptrend has been in place since July 2009 which is roughly the date when US Industrial Production began to turn higher. This data does not predict with any precision employment levels, other economic indicators or equity & bond prices. The ASA Staffing Index does provide guidance on the general direction of our economy. There is no simple conversion factor to market prices. There is a historical pattern that improved economic activity has been always correlated with higher stock and lower bond prices.

Here is the chart in a different form (note the lack of unusual index readings):

Now those with bearish predilections will say, “Obamacare is causing everyone to be cut to part time help and that is why temp help is up” so this skews the data. It is a good point, only it isn’t true. First, “temp help” does not mean “part time” which is classified under Obamacare as
Check out the chart below:

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What you see above is private sector hours per week worked just below the pre-recession (bubble) levels and temp help acting as it has done historically. I used private employees only not govt’t as localities and the Fed gov’t will see minimal effect from the Obamacare regs due to Unions. If the “Obamacare is pushing everyone to part time (temp help) work” thesis was true, these two series would be behaving much differently now than they have in the past. Just so we are clear, I think Obamacare is the most excrement laden piece of useless legislation ever to come out of Washington. But fact are facts. Rather than cutting people’s hours, most of what I have seen companies doing is Disclaimer page for my full disclaimer.

Written By: Todd Sullivan