A seasonal slowdown in hiring led temporary and contract staffing employment to fall by 7.5%, or 154,000 jobs, from the fourth quarter of 2025 to the first quarter of 2026, according to data released today by the American Staffing Association.

On a quarter-to-quarter basis, temporary and contract staffing employment and sales typically decline in the first quarter, grow in subsequent quarters, and peak in the fourth quarter. While the first quarter of 2026 aligned with this pattern, it marked the slowest first quarter rate of decline since 2022.

The decline in year-to-year total staffing employment narrowed to 4.6% in the first quarter, marking a substantial improvement from the 10.8% drop in the first quarter of 2025 and the slowest year-to-year decline since the fourth quarter of 2022.

ASA expects it is likely the industry will record year-over-year growth during subsequent quarters in 2026, even when considering significant economic headwinds and global uncertainty.

Staffing sales also reported narrowed declines. In the first quarter of 2026, staffing sales dropped 4.3% from the fourth quarter of 2026 to a total of $27.6 billion. However, the 1.6% drop from the first quarter of 2025 represents the smallest first-quarter sequential decline since 2022, and the narrowest year-to-year gap since 2023.

"In the face of significant economic uncertainty, the staffing industry is showing further signs of stabilization," said Stephen Dwyer, ASA president and chief executive officer. "First quarter sales, payroll, and employment all recorded their smallest declines in years, providing reasons for optimism for the remainer of the year."

The industry is continuing to adjust and position itself for future growth by providing a vital service matching candidates with clients—especially during a time of historically low hiring when many jobseekers are finding it difficult to find employment."

Note: While the ASA Staffing Index and the quarterly ASA Staffing Employment and Sales Survey use similar underlying methodology, the Staffing Employment and Sales Survey reflects average employment levels over a quarter, while the Staffing Index calculates change in employment on a weekly basis.

As a result, the ASA Staffing Index may reflect emerging trends ahead of the Staffing Employment and Sales Survey. Nevertheless, both measures currently highlight a staffing industry that is showing signs of stabilization.

To learn more about the quarterly ASA Staffing Employment and Sales Survey, visit americanstaffing.net/quarterly-survey, or follow ASA research on Twitter.