Temp hiring no longer a good sign

WASHINGTON - It's not the signal it used to be.

When employers hire temporary staff after a recession, it's long been seen as a sign they'll soon hire permanent workers.

Not these days.

Companies have hired more temps for four straight months. Yet they remain reluctant to make permanent hires because of doubts about the recovery's durability.

Even companies that are boosting production seem inclined to get by with their existing workers, plus temporary staff if necessary.

"I think temporary hiring is less useful a signal than it used to be," says John Silvia, chief economist at Wells Fargo.

"Companies aren't testing the waters by turning to temporary firms. They just want part-time workers." The reasons vary. But economists and business people say the main obstacle is that employers lack confidence that the economic rebound has staying power. Many fear their sales and the overall economy will remain weak or even falter as consumers spend cautiously.

Companies also worry about higher costs related to taxes or health care measures being weighed by Congress and statehouses. That's what Chris DeCapua, owner of employment firm Dawson Careers in Columbus, Ohio, is hearing from clients. He says demand for temporary workers has surged.

Employers added a net 52,000 temp jobs in January - the fourth consecutive month of gains. Over that time, total U.S. jobs shrank by 106,000. Employers have managed to boost productivity by squeezing more work out of their existing staffs. - AP