One of the curiosities in the latest jobs report is the sharp increase in temporary jobs. Employers worried about being understaffed but also fearful of the possible need for cuts in the first half of next year are hiring people temporarily for jobs that otherwise ought to be permanent positions. If the economy is booming by January, many of these temporary hires could become permanent. But if the economy still looks pale when we get to that point, and particularly if Congress can’t fix the fiscal drag on the economy, the latest temporary hires could form the beginning of a new round of mass layoffs.
Layoffs in the hundreds of thousands are on the way even in the more favorable scenario. Every week at least one major employer announces new layoffs, and major industries are overbuilt and will need to cut back somehow.