NEWS RELEASE

CORESTAFF COMMENTARY:
JOB GROWTH ISN'T RUNNING ON EMPTY

By Steven Drexel,
CORESTAFF president and chief executive officer

This article is among a series of commentaries written by Steven Drexel discussing key issues and trends affecting today's labor market. Drexel is a member of the Bureau of Labor Statistics' Business Research Advisory Council. An archive of past commentaries may be found at www.corestaff.com/press. Please attribute information to Steven Drexel, president and chief executive officer of CORESTAFF Services if you adapt all or part of this piece for articles. If you are interested in connecting with Drexel or receiving more information about CORESTAFF, please contact Sally A. DeVito Jozwiak at 713-438-1567 or sally.jozwiak@corestaff.com.

Below, you will find Drexel's remarks on:

• A brighter employment picture
• Job growth momentum despite new challenges
• Stealth hiring

June 2004 - For months and quarters, analysts reported great news regarding strong economic growth, bold consumer spending, incredibly cheap credit, delivering industry and swelling profits. But the lack of significant employment growth was spoiling the mix and depressing an otherwise sunny economic picture. Starting with March -- and not one moment too soon – the employment picture brightened. Payroll growth shot to 337,000 jobs in March followed by a healthy 288,000 positions in April. These were clearly breakout results compared to an average of only 81,000 new jobs during the previous six months.

Just as employment growth is making its move, the stream of general economic news has been a bit more mixed of late. Certainly, the fallout from events in Iraq combined with mounting energy prices and escalating interest rates casts a shadow on the economic forecasts. Don’t expect these uncertainties to keep things unsettled. Thankfully, these challenges will be offset by emerging employment growth, income growth and the resulting robust consumer spending.

The employment growth forecast is secure since initial claims for unemployment insurance remain low and continuing claims for unemployment benefits have decreased. Additionally, factory employment as measured by the Institute for Supply Management’s (ISM) employment index reached a 31-year high in May.



Furthermore, Business Roundtable’s June Economic Outlook Survey reported that its executive members are decidedly more optimistic about hiring during the next six months.


CEO ECONOMIC OUTLOOK INDEX

More broadly, still-improving industrial production and impressive growth in corporate profits generate continued strength in capital spending, providing the underpinning for solid growth during the coming quarters.

So despite some rising concerns regarding Iraq, energy prices and interest rates, there remains enough momentum in the factory sector and new stimulation from employment growth to keep the economy on track.

Additional Observations:

1. May Unemployment Number –
   It will stabilize at 5.6 percent.
   The trends point to a gradually improving employment picture. Given that the unemployment rate declined in April, I expect May’s rate to remain at 5.6 percent before improving another tenth of a point in June.
   
   
2. Companies are beginning to build bench strength by employing greater numbers of temporary staff and also hiring permanent staff.
   We are seeing increased activity from our clients for both types of employees. In November 2002, I presented the concept of stealth staffing – crafting the most productive and efficient workforce. The forces that inspired stealth staffing, flexible employment and outsourcing, all support the continued use of contingent labor to meet a business’ needs during each part of a business cycle –change, growth, and stabilization.

About CORESTAFF Services

CORESTAFF Services is one of the largest national staffing firms in America, with offices in 19 states. CORESTAFF also operates as TeleSec CORESTAFF in the Washington, DC area and Leafstone Staffing Services in the New York City and northern New Jersey metropolitan areas and southern Connecticut. CORESTAFF is not affiliated with Core Staffing Services, Inc. which operates in the New York Metro Area. CORESTAFF is headquartered in Houston, Texas; 713-438-1400.

Visit CORESTAFF Services on the Web at: www.corestaff.com, www.it.corestaff.com, www.careertrust.com, www.techresources.coretaff.com, www.infocurrent.com and www.employmentzone.org.

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