Temporary positions in the U.S. have surged lately, and this situation could potentially have a significant impact on credit markets if it is a precursor to the creation of more full-time jobs.
Burgeoning employment could boost loan demand
If this is the case, and companies start hiring more people for full-time roles, it could improve the plight of consumers. If these key individuals have stronger income, they could seek credit more aggressively. This, in turn, could potentially impact both loan demand and loan origination.
Since 2009, one-tenth of all new jobs created have been temporary, according to government data reported by The Wall Street Journal. In some areas, these non-permanent roles have provided a much greater share of job growth. For example, in Stockton, California, these temporary positions have accounted for almost all of the improvements in net payrolls since 2009, according to CareerBuilder data. In addition, the majority of roles created in Milwaukee and Cincinnati have not been permanent in nature.
March saw particularly robust growth in temporary roles, as 28,500 of these positions were added during the month. As a result of this sharp gain, 15 percent of all new jobs created in March were not full-time. In addition, over the last year, the number of temporary positions has surged close to 10 percent.
Eric Gilpin, president of CareerBuilder's Staffing & Recruiting Group, told Forbes about how this situation could positively impact the market for permanent positions.
"Growth in temporary employment is typically an indicator that more permanent jobs are coming down the road," Gilpin told the the media outlet.
He predicted that this year, both permanent and temporary roles will grow handily, according to the news source. The corporate executive projected that while the labor market was better in 2013 than it was in 2012, this year will represent improvement over the last.
US economy has recovered all jobs lost since 2008
In March, CNN Money reported that the U.S. economy had recovered all the jobs it lost since 2008. As a result of reaching this crucial level, the labor market might benefit from robust momentum. Even after reaching this milestone, the current situation could improve a great deal. More than 10 million Americans are unemployed. If the labor market keeps getting better, demand for credit could increase quite a bit as more of these individuals obtain the income provided by a full-time job. As people seek out more credit, loan origination could trend higher.