When the July Jobs Report was released by the US Bureau of Labor Statistics, the headlines were understandably dominated by the drop in overall nonfarm payroll employment. Look beyond the headlines, however, and you’ll find an economic comeback story that was easy to miss: the growth of temporary help services.

The facts are clear. Out of more than 300 industries analyzed by BLS, temporary help services has added the second-highest number of jobs in 2026. It’s also shown growth every month this year, including 3,400 jobs in July. One in ten jobs created this year have been temporary positions.

So what’s driving the return of temporary work?

As the chief economist at the American Staffing Association, which represents third-party staffing and recruiting firms, I’ve been closely tracking the return of temporary help services after a multi-year decline. I believe this recovery goes beyond the staffing industry. It coincides with shifting perceptions of work with the potential to change the way employers and employees interact with each other.

Contract employment is becoming a popular avenue for young adults seeking an entry point into the workforce. When the BLS last examined contingent work in 2023, young adults under the age of 24 were four times more likely than prime age workers and six times more likely than older workers to hold contingent jobs. An ASA-i360 survey suggested that 40 percent of temporary workers in 2025 were between the ages of 18 and 29.

This format of work is uniquely appealing to young job seekers in an uncertain labor market. The ability to hold multiple assignments at once, or in addition to a full-time job, aligns with young job seekers’ aversion to relying on one employer for economic security. The autonomy afforded by such arrangements also resonates with a generation of young workers who are less willing to trade their time and well-being for the uncertain promise of a long-term career.

But young workers are not embracing temporary employment by themselves. Their choices are coinciding with employers’ own preferences for such arrangements as well. At a time of rising inflation as well as increased economic uncertainty, employers are turning towards project-based hiring as a way to limit costs and avoid another episode of over-hiring like the Great Reshuffle.

That shift is visible in the business received by staffing companies today. Demand for temporary workers is rising in many segments of the labor market such as construction, transportation, professional services, healthcare and government – not because these industries have suddenly embraced contract work, but because employers are seeking the ability to adjust their workforces as conditions change.

Together, shifting preferences among employers and young job seekers in favor of contract work are reshaping the terms of employment around greater autonomy and adaptability. Employers are willing to trade the stability of a permanent workforce for the flexibility to adjust to volatile market conditions like rising cost pressures as well as economic uncertainty. At the same time, young workers are willing to trade the stability of a traditional career path for flexibility over how they work and what they gain from it.

Naturally, this kind of rugged individualism poses risks to the broader labor market. As workers gain more autonomy over where they build their careers, employers will have to fight for their headcount through investments in culture and retention. Otherwise, they could realize substantial disruptions to their knowledge pipelines and productivity, just as increased retirements as well as lower levels of immigration constrict the number of eligible job-seekers available to them.

As employers exercise their freedom to execute short-term adjustments in headcount, workers will have to assume more accountability for building long-term careers out of each assignment and every experience. They will also require robust safety nets to seamlessly transition between contracts. Initiatives like microcredentialing programs, unemployment insurance, and portable benefits could limit the severity of future labor market downturns by supporting this growing cohort of workers.

Temporary help services employment often stands at the forefront of changes within the broader labor market, and its recent pickup signals more than a mere rebound in demand. It is just beginning to rise at a time when both employers and young adults are increasingly viewing contract work as a new kind of security within an uncertain labor market.

But with the flexibility afforded by contract work comes responsibilities for both sides. Employers will have to compete more aggressively to attract the employees they need, while workers will have to be more deliberate about turning short-term assignments into long-term careers. As permanence becomes harder for either side to promise, the flexibility to adapt might become the most valuable form of security in the labor market of tomorrow.

Noah Yosif serves as Chief Economist at the American Staffing Association (ASA). He is also a member of the Economic Advisory Committee of the World Employment Confederation (WEC).

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