Several bright spots in Friday's jobs report include:
1. Employment in temporary help services continued to grow by 15,900 jobs in December, which is the 14th increase during the last 15 months. Since the cyclical low of 1.724 million jobs in September 2009, there has been an increase of 495,000 jobs in the temporary sector to 2.219 million jobs in December. That level of temporary and contract employment jobs is the highest since September of 2008, 27 months ago.
2. Average overtime hours for the manufacturing sector in December matched the 31-month high of 4.0 hours per week in November, the highest level since April 2008.
Taken together, these two trends suggest that many U.S. companies are meeting the increasing demand for their products and services by: a) using temporary and contract employees instead of hiring permanent, full-time employees, and b) using existing employees more intensely with increased overtime hours in the manufacturing sectors. Both of those factors would be characteristic of an economy that is in recovery measured by production, income and sales, but is not yet creating enough full-time, permanent jobs to bring down the overall jobless rate to 9% or lower.
We're still in a "jobless recovery" like the last two post-recession periods, but labor market conditions continue to improve week-by-week for jobless claims, and on a monthly basis for employment growth and the jobless rate. Even though we would all like job creation to accelerate, we can definitely look forward to a better year in 2011 for the U.S. employment situation.