Last week's employment report was by most measures disappointing. The Labor Department reported Friday that the nation's employers cut 131,000 jobs last month -- many more than the drop of 60,000 positions anticipated by analysts. Moreover, job creation was less robust than expected, with the economy creating only 71,000 new jobs in July, fewer than the 100,000 that experts had predicted.

Adding to the pain, June jobs cuts were revised upward, adding nearly 100,000 to the decline of 125,000 reported a month ago.

Unusual Loss of Temp Jobs

Then there was one inexplicable part of the report: a drop in temporary employment. After adding temp jobs every month since September, the number of temporary workers fell to a loss of 5,600 jobs last month. The decline is at odds with the cycle of economic recovery, which generally sees an increase in the number of temp workers as employers ramp up to meet growing demand. Companies generally hold off increasing the size of their permanent workforce amid a nascent recovery, fearing they may just have to lay workers off should the economy downshift.

The loss in temp jobs also isn't consistent with what many staffing firms are witnessing in recent weeks, says Tig Gilliam, chief executive at Adecco Group North America, a unit of Switzerland-based Adecco (AHEXY), the world's largest staffing company.

"I have to think the temporary staffing number is more of an anomaly in the month than it is a trend," he says. Adecco has seen its business grow, Gilliam says, and he believes that's emblematic for the industry as a whole. "I don't think we're that different from the broader temporary employment base."

Temp Hiring Not Yet Converting to Permanent Hiring

Adding to the puzzlement, the recovery has heretofore followed a typical pattern: an increase in hiring for temp workers in the industrial sector, followed by a rise in the number of professionally skilled workers. An issue that still concerns Gilliam is that the temporary hiring of professionals, in fields such as information technology, consulting and engineering, hasn't yet resulted in permanent hiring of those workers.

"That's where we're lagging," Gilliam says, which is why Friday's report only showed a gain of 71,000 jobs instead of, say, 271,000 jobs. The good news is there is growth in hiring among private employers, he says. The bad news is that it's not as fast as it should be.

But it isn't only private employers who are holding off hiring. Cash-strapped states and cities, which often rely on temp workers, are facing tough times, too. Further, temp hiring by the federal government related to the 2010 Census has run its course, and those positions have ended.

Private Sector Must Lead

On Thursday, the Senate pushed through $26 billion in funding to help states, many of which are facing huge shortfalls. It's a common theme that states are looking for more federal help, Gilliam says, especially in the wake of cuts in federal support. The House is expected to reconvene this week to vote on the measure, after adjourning for the August recess.

Still, the economy can't rely on government hiring to lead the jobs recovery, Gilliam says. "It's got to be private sector employment."

Unemployed workers, especially those who have been out of a job for a long time, would welcome any answer at this point. But given the pace of the recovery, it doesn't seem likely that hiring -- by either companies or governments -- will spike anytime soon.

Increase your money and finance knowledge from home

What is Inflation?

Why do prices go up?

View Course »

How to Avoid Financial Scams

Avoid getting duped by financial scams.

View Course »

Add a Comment

*0 / 3000 Character Maximum


Filter by:

Private production ultimately pays the bills for social programs and supports the dollar. Punish business = punish the retired and the poor.

Stop blaming the CEOs they are only opportunists created by government by taking away shareholders rights to vote the bums out.

If the independent shareholders could vote on executive salaries, they would not even dare to ask for such high amounts.

August 10 2010 at 9:09 AM Report abuse +2 rate up rate down Reply

how many workers had their weekly hours reduced ??

August 10 2010 at 8:54 AM Report abuse +2 rate up rate down Reply

When will the Obama administration admit that G. Bush is no longer in charge?

August 10 2010 at 8:46 AM Report abuse +3 rate up rate down Reply

If business only exists to be taxed and regulated then government will be the only business around. No-one taxes or regulates government so it grows freely. Too bad government can not produce any real money it can only borrow, now that it has eaten the goose that laid the golden eggs.

August 10 2010 at 8:34 AM Report abuse +5 rate up rate down Reply

Hind sight is almost always 100%, at least it is for people who will admit their mistakes. I look back at the last 45 years and I can see where I supported and help elect people to public office who weren't qualified to run a Kool Aid Stand, let alone the Largest Economic Power in the world. I won't go into names, but I did help put in office at least one President and several Senater and Congressmen who literly trashed our economy. I started out voting Republican, becasue it was a Democrat who sent me to Vietnam and a Republican who brought me home, then the Republican screwed up big time. So I switched to Democrat and made a bigger mistake. After the Democrat cost me my job and came close to costing me my house, I became an Independent. Now I vote for people not parties. Our current mess is the accumulation of 100 years of failed economic policies, some more than others, but all helped. This Novemeber I'm not sure what I will do. At first I was going to vote straight Republican to teach the Democrats a leason, but that's the mentality that got the current idiots elected. Then I was thinking about just voting out incumbents, regardless of their party. In the end I hope I'm smart enough to vote for the most qualified. I reality, only my Congressman is up for re election and he's a Democrat, so I don't really have much of a decision to make till 2012.

August 10 2010 at 7:48 AM Report abuse +4 rate up rate down Reply

Amazing the so called experts are wrong again Does it mean thier not really an expert Well theyve been experts at fudging the real truth and the real truth still isnt all out

August 10 2010 at 6:57 AM Report abuse +4 rate up rate down Reply
1 reply to mcfarlanehghlnd's comment

to many so called experts know crapoa. seems no one agrees 1000 experts 1000 different bs

August 10 2010 at 8:57 AM Report abuse +1 rate up rate down Reply

The Obama Admin has failed in every aspect of its expectations. America is in rebellion and small businesses are in revolt. Unless Obama changes course with his political ideology; quits union pandering; growing a bigger government and returns to the free market enterprise system, there will be no progress and hiring of individuals. Investment at its best is a risk but investing with the uncertainty of the Obama policies; increased taxes; higher costs of medical insurance; government mandates and nationalizations of public owned businesses; undisciplined spending by a corrupt congress; national debt out of control, will not inspire the American businessman to higher goals and production. Wake up America! November is the beginning of the end of the Obama social experiment! Vote the corruption out of congress and the WH.

August 10 2010 at 6:45 AM Report abuse +7 rate up rate down Reply

You are all beginning to see the light! Finally. There were no drops in unemployment only manufactured ones in their heads. Wake UP America! Wake Up or there will be a big change. God Bless America.

August 10 2010 at 6:43 AM Report abuse +8 rate up rate down Reply

The scary thing is, so many of you out here will re-elect the same scoundrels that originally got us into the mess we are in now. My how short sighted so many of you out here are. You are so quick to swallow the Kool Aid that the Republican Right Wing spin machine has manufactured, working on your predjudices and fears.
The Republicans FREAKED when the American people elected a person of color into the WHITE HOUSE. I guess they thought the White House was only for White People. That's how ignorant so many of our fellow Americans truly are.
Shame on us for being so narrow minded and short sighted.
We will reap what we sow.

August 10 2010 at 5:29 AM Report abuse -6 rate up rate down Reply

Let's be honest our American greed for cheap products and services have forced American corporations to ship American jobs overseas to places like India and Mexico. As long as workers in those countries will accept wages of $1.00 per hour and provide excellent work quality it stands to reason that US / Multinationals will export U.S. jobs overseas. Most likely these jobs will NEVER return back. Our government over the past 30 years has sold us down the river. Republicans and Democrats alike are to blame. We are the enemies within. We all want to shop at Walmart and pay 1950's prices for goods and services. The only problem with our buy cheap and at the same time lust to live like Donald Trump mentality is something has to give. What we have given up are millions of American jobs and creating a 2 class system, Rich and Poor.
We are so screwed.

August 10 2010 at 5:21 AM Report abuse +6 rate up rate down Reply
1 reply to Ron's comment

in 1913, you couldbuy 15# potatoes, 10# of flour, 5# sugar, 5# chuck roast, 3# round steak, 3# rice, 2# each of cheese and bacon, a pound each of butter and coffee,two loaves of bread, 4 quarts of milk and a dozen eggs......the dollar has been made valuless intentionally

August 10 2010 at 5:34 AM Report abuse +2 rate up rate down Reply