For the past two months, in analyzing the unemployment reports I've noted that temporary jobs are growing. I've said that this is a good sign for permanent job growth, but haven't really explained why. I came across a great chart that does exactly that in a picture.
The red line is temp jobs; the blue line is permanent non-farm employment. As this chart demonstrates, temp jobs lead permanent job growth. It's rare to see such a clear correlation between two variables.
The chart shows how temp jobs have done well over the past few months, as they've hit the trough and begun to rebound. So too should permanent jobs, if this correlation continues to hold.
What's a little troubling is that permanent jobs have hit bottom below that of temporary jobs historically in the graph shown. Obviously, we'd hate to see that here, because that would mean a lot more job losses. But I think that the time correlation looks more relevant than the distance between the curves above. So if that holds up, looking at 2003, the permanent job trough won't be far off.