The sizable increase over the past year in employment at temporary help agencies another potential margin of adjustment for firms unwilling to take on permanent employees - is consistent with this view. And, further supporting this hypothesis, one hears reports of longer hours worked by many white-collar and nonproduction workers.
If this hypothesis is correct, then the recent strength in business investment bodes well for an upturn in the labor market if the pickup in capital spending is an indication that businesses have become more optimistic about the future course of the economy.