Labor Forecast Predicts 7% Increase in Demand for Temporary Workers for 2022 First Quarter, Signaling Further Signs of Recovery Ahead

Labor Forecast Predicts 7% Increase in Demand for Temporary Workers for 2022 First Quarter, Signaling Further Signs of Recovery Ahead

— Industry Consulting Firm G. Palmer & Associates’ Quarterly Forecast Assists in Previewing Near-Term Hiring Patterns —


Newport Beach, California, January 13, 2022, — Demand for temporary workers in the United States is expected to increase 7.0% on a seasonally adjusted basis for the 2022 first quarter, when compared with the same period in 2021, according to the Palmer Forecast™, released today. The increase in demand principally reflects continue economic recovery from the pandemic-related business lockdowns.

The Palmer Forecast™ indicated a 12.3% increase in temporary help for the 2021 fourth quarter. Actual results as reported by the Bureau of Labor Statistics (BLS) came in less than anticipated, with an increase of 8.7%. The difference was due primarily to the latest Covid-19 Omicron variant, as well as employees being highly selective in evaluating job opportunities during a strong labor demand environment, with 10.6 million open jobs reported by the BLS as of January 4, 2022.

Source: G. Palmer & Associates; Bureau of Labor Statistics (BLS)

Source: Bureau of Labor Statistics (BLS)

The BLS reported that temp help jobs declined by 1,600 in December, but increased 6.1% year-over-year. There was a solid rebound in temp help jobs in 2021, with a total of 167,100 added for the year and 13,950 average per month. According to the BLS, 332,000 temp jobs were lost in 2020, or an average job loss of 27,750 per month. The BLS also reported that 42,000 temp help jobs were lost in 2019, an average of 3,500 fewer jobs per month. In 2018, more than 99,000 temp help jobs were added versus 2017, an average of 8,200 per month. Additionally, 96,000 temp jobs were added in 2017 over 2016.

The Labor Department reported that nonfarm payroll employment increased by 199,000 jobs in December 2021, significantly less than consensus estimate increases of 400,000 jobs. For the 2021 fourth quarter, there were 365,000 nonfarm jobs added on an average monthly basis, up 4.25% on a year-over-year basis. For 2020, nonfarm employment was down 6.17%, or 9,372,000 jobs, compared with 2019. To put this in perspective, there were 176,000 jobs added on average per month in 2019 and 2.1 million total jobs added for that year, which was less than the 220,000 added per month in 2018, and 2.6 million for that full year. For 2017, a total of 2.1 million new jobs were created, versus 2.2 million new jobs in 2016.


The key categories of jobs created are as follows:

  • Private Sector: +211,000
  • Total Non-Farm: +199,000
  • Leisure and Hospitality: +53,000
  • Professional and Business Services: +43,000
  • Manufacturing: +26,000
  • Construction: +22,000
  • Education and Health Services: +10,000
  • Temp Help: -1,600
  • Government sector: -12,000

Source: Bureau of Labor Statistics (BLS)

In December 2021, the labor participation rate was unchanged at 61.9%, and it has been in a narrow range of 61.4% to 61.9% since June of 2020. The U3, commonly referred to as the unemployment rate, decreased slightly to 3.9% in December, from 4.2% in November.

As reported by the BLS, the rate of unemployment for workers with college degrees decreased 10 bps in December versus November, to 2.1%, and the unemployment rate for workers with less than a high school education increased 30 bps to 5.2%. The U6 unemployment rate, which tracks those who are unemployed, as well as those who are underemployed and are working part-time for economic reasons, was down 40 bps to 7.3% in December versus November. The U6 rate is considered the rate that most broadly depicts those most affected by the last economic downturn and measures the rate of discouraged workers.

“As welcomed as the increases are, they need to be kept in perspective because of the unusual consequence of the evolving pandemic environment and economic recovery,” said Greg Palmer, founder and managing director of G. Palmer & Associates, an Orange County, California-based human capital advisory firm that specializes in workforce solutions. “One of the most revealing indicators to watch is the temp help penetration rate, because it measures temp help as a percentage of total employment. In December, the temp penetration rate decreased slightly from November, to 1.87% of the total labor market, versus 1.57% pre-pandemic. The penetration rate cycle peaked at 2.05% in December 2015 and was at a low of 1.3% in June 2009.

Source: Bureau of Labor Statistics (BLS)

“The temp help employment market improved again in December, and the trend likely will continue,” Palmer added. “The largest issue remains the number of workers re-entering the workforce, as there is greater selectivity in seeking new opportunities, with the current high demand for employees. Staffing companies are reporting extreme difficulty filling the many current open jobs they have. The American Staffing Association (ASA) Staffing Index also is continuing its rebound from an index low of 59.9 on May 10, 2020, to a strong close of 104 on December 26, 2021, a 17.1% increase from the same week last year, and exceeding 2019 levels. This all adds up to further signs of recovery in temp help and likely revisions to the BLS reported numbers in the future, since the BLS reported a year-over-year increase of 6.1% vs the ASA index of 17.1%.”

About the Palmer Forecast™

The Palmer Forecast™ is based, in part, on BLS and other key indicators. The model was initially developed by the A. Gary Anderson Center for Economic Research at Chapman University and serves as an indicator of economic activity. Companies that employ temporary staff use the forecast as a guide to navigate through fluctuating economic conditions in managing their workforce to meet business demands.


About G. Palmer & Associates

  1. Palmer & Associates, founded in 2006, provides advisory services in the human capital sector. FounderGreg Palmer has served on the board of the American Staffing Association and was president and chief executive officer of RemedyTemp, Inc., one of the nation’s largest temporary staffing companies, prior to its sale in June 2006. For more information,

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