Good News from Temp Jobs?

Michael Rudd, CFA | President, CEO & Portfolio Manager

Over the past few weeks, we have mentioned in our Outlook that employment in the US is as tight as it has been in decades. Indeed, the unemployment rate has not been this low since the late 60’s. The tight labor market has led to significant wage pressure, which is a major part of the inflation that we are all experiencing. We note two quotes below that we think are important. The first is from a US Fed member and shows the FOMC’s commitment to low inflation and strong employment. The next quote is from the CFO of Ziprecruiter and he clearly says the job market is slowing.


  • We are absolutely committed to getting back to 2% over the next few years. Although goods prices have come down in last several months, there are signs this may not go as quickly as hoped. We have demand that exceeds supply, the labor market is extraordinarily strong. Monetary policy must bring demand and supply back into balance. Don’t want to allow inflation expectations anchor to slip.” – New York Federal Reserve Bank President John Williams
  • “I just want to start by saying some things as plainly as possible, which is, clearly, we’re in a macroeconomic slowdown. And online recruiting has effectively cooled across the country…. Employers have been decreasing their willingness to pay for hires, and many companies are executing layoffs as they tighten budgets. Rather than showing a more typical seasonal rebound from the lows of the December holiday period, we saw online job postings in our marketplace remain depressed.” – Ziprecruiter (ZIP-US) CFO Timothy Yarbrough

Figure 1 presents temporary jobs and total employment for US workers for just under the past 25 years. The main take away for us is that the temporary job market turns well ahead of the overall employment. It appears, anecdotally from the quotes above and the data in the chart, that this could be starting to happen. It does makes sense that as the business cycle matures, the demand for temporary workers wains and then ultimately overall unemployment increases. This should, in theory, have a dampening effect on inflation

“This means that” we will continue to watch this data very closely. In the past, a turn in total employment has resulted in a recession. This has been true in almost every case since 1940. This cycle has been very different than others because of the impacts of the pandemic, lockdowns and resulting stimulus. We are in somewhat uncharted territory

Pathfinder Asset Management Ltd. | Equally Invested™
1450-1066 W. Hastings Street, Vancouver, BC V6E 3X1
E | T 604 682 7312 |
Sources: Pathfinder Asset Management Limited

National Instrument 31-103 requires registered firms to disclose information that a reasonable investor would expect to know, including any material conflicts with the firm or its representatives. Doug Johnson and/or Pathfinder Asset Management Limited are an insider of companies periodically mentioned in this report. Please visit for full disclosures.

Changes in Leverage. We are increasing the asset ceiling to 2.0 times the market value of equity for Pathfinder International Fund and Pathfinder Real Fund to be consistent with Pathfinder Partners’ Fund and Pathfinder Resource Fund.

*All returns are time weighted and net of investment management fees. Returns from the Pathfinder Partners’ Fund and Partners’ Real Return Plus Fund are presented based on the masters series of each fund. The Pathfinder Core: Equity Portfolio and The Pathfinder Core: High Income Portfolio are live accounts. These are actual accounts owned by the Pathfinder Chairman (Equity) and client (High Income) which contain no legacy positions, cash flows or other Pathfinder investment mandates or products. Monthly inception dates for each fund and portfolio are as follows: Pathfinder Core: Equity Portfolio (January 2011), Pathfinder Core: High Income Portfolio (October 2012) Partners’ Fund (April 2011), Partners’ Real Return Plus Fund (April, 2013), and Partners’ Core Plus Fund (November 2014).

Pathfinder Asset Management Limited (PAML) and its affiliates may collectively beneficially own in excess of 10% of one or more classes of the issued and outstanding equity securities mentioned in this newsletter. This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor PAML can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your portfolio manager, who can assess all relevant particulars of any proposed investment or transaction. PAML and the author accept no liability of any kind whatsoever or any damages or losses incurred by you as a result of reliance upon or use of this publication.