Temp jobs and temp stocks boom as Fed predicts 'jobless recovery'

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temp-jobs-and-temp-stocks-boom-forecasters-predict-jobless-recovery

While massive layoffs continue to mount even as the unemployment rate blows past 10%, the market for temporary hires is booming. On Friday, the Labor Department said that temporary-worker payrolls rose by 34,000 in October -- the biggest gain in two years. It was the third consecutive monthly gain in temporary employment, even as the overall unemployment rate soared to a 26-year high of 10.2%. Adecco (AHEXY) -- the world's biggest temporary employment firm -- reported better than expected third-quarter earnings amid a pickup in demand.

The boom in temp jobs has been seized on as a ray of light in an otherwise dismal jobs report, since temp hiring has sometimes foreshadowed broader hiring by a few months. But as investors look for clues about the unemployment picture -- which has sweeping implications on items ranging from consumer demand to the Fed's decisions on interest rates -- they should take some major shifts in the U.S. economy into account before relying on a replay of history.