Most 2013 job growth is in part-time work, survey suggests

McClatchy Washington BureauAugust 2, 2013 

BIZ WRK-JOBLESS-VETERANS 2 RA

A roofing company recently launched a program that retrains veterans to groom them for jobs with the company.

SHAWN ROCCO — Raleigh News & Observer/MCT

  • Professional and business services, up 36,000.

    Manufacturing, up 6,000.

    Leisure and hospitality, up 23,000.

    Health care, up 2,500.

    Construction, down 6,000.

    Temporary help services, up 7,700.

    Transportation and warehousing, up 4,600.

    Retail, up 46,800.

    Financial services, up 15,000.

    Government jobs, up 1,000.

— The July government employment report released Friday showed the job market treading water.

And a closer look at one of the two measures the Labor Department uses to gauge employment suggests that part-time work accounted for almost all the job growth that’s been reported over the past six months.

Employers added a weaker-than-expected 162,000 nonfarm payroll jobs in July, according to the Establishment Data Survey, which relies on reporting by a large sample of businesses.

The unemployment rate is measured by the separate Household Survey, and it fell two-tenths of a percentage point to 7.4 percent, its lowest level since December 2008. That’s due in part to slow growth in the labor force. The jobless rate is based on a sample of self-reporting from ordinary people across the nation, and it’s the Labor Department measure that shows a very troubling trend in hiring.

“Over the last six months, of the net job creation, 97 percent of that is part-time work,” said Keith Hall, a senior researcher at George Mason University’s Mercatus Center. “That is really remarkable.”

Hall is no ordinary academic. He ran the Bureau of Labor Statistics, the agency that puts out the monthly jobs report, from 2008 to 2012. Over the past six months, he said, the Household Survey shows 963,000 more people reporting that they were employed, and 936,000 of them reported they’re in part-time jobs.

“That is a really high number for a six-month period,” Hall said. “I’m not sure that has ever happened over six months before.”

The Establishment Data Survey provides the headline-grabbing hiring number that’s most cited in news media, but it doesn’t distinguish between part-time and full-time work. Similarly, the Household Survey doesn’t say whether the part-time workers have found new jobs or represent workers whose employers have shifted them from full time to part time.

Both surveys provide estimated snapshots of hiring, since it’s impossible to track every hire and job loss in real time.

“There is something going on if such a large share of the hiring is part time,” Hall said.

He said the overall share of part-time jobs to all jobs, 19 percent, wasn’t a problem – yet.

Hall speculated that the implementation of the Affordable Care Act, shorthanded as Obamacare, might be resulting in employers shifting workers to part-time status to avoid coming health care obligations.

“There’s been so much talk about the effects of Obamacare on part-time work,” he said. “This is such an unusual thing to see.”

By most measures, Friday’s jobs report disappointed. Mainstream economic forecasters had projected a number closer to 200,000 in the Establishment Data Survey, in part because of good economic-growth numbers for April through June earlier in the week. Statisticians also revised downward the strong jobs numbers from May and June, suggesting that hiring in the first half of the year averaged about 192,000 a month, near where it was last year.

“Can’t help but be let down,” said Scott Anderson, the chief economist for San Francisco-based Bank of the West. “Nonfarm job gains were mediocre at best in July and combined with the . . . downward revisions for May and June, the job creation performance remained less than inspiring.”

Professional and business services and the leisure and hospitality sectors continued to grow, but at a slower pace, adding 36,000 and 23,000 jobs, respectively. Surprisingly, hiring in the usually robust health care sector slowed to a trickle, at 2,500 new jobs.

The job market “isn’t as soft as last month’s data suggest,” said Mark Zandi, the chief economist for forecaster Moody’s Analytics. “Looking at the data over the past several months shows that the job market is slowly but steadily improving. . . .

“New homebuilding is coming back to life, but it has yet to translate into more construction and other housing-related jobs. That should change in coming months as housing activity ramps up.”

Manufacturing added a tepid 6,000 jobs in July. The government separately reported Friday a 1.5 percent increase in factory orders in June, led by big-ticket items called durable goods, which rose at 3.9 percent.

“When you look beyond gains in the motor vehicle sector, job growth continues to be weak,” Chad Moutray, the chief economist of the National Association of Manufacturers, wrote in his blog Shopfloor.org. “Manufacturers continue to be hesitant to add new workers, a trend that will probably continue until they perceive the economic marketplace to be on a firmer footing.”

Construction hiring fell by 6,000 in July, even as the unemployment rate in that sector dropped to the lowest point in five years.

“Although the unemployment rate for experienced construction workers came down to 9.1 percent in July, many of those workers have left the industry for other jobs, school or training programs, or retirement,” Ken Simonson, the chief economist for Associated General Contractors of America, wrote in an analysis of the jobs report.

The best showing in July was in the retail sector, which added almost 47,000 positions.

“While unemployment remains stubbornly high . . . retailers are adding to their ranks and payrolls,” Matthew Shay, the president of the National Retail Federation, said in a statement.

The financial markets, which have been on a tear this year, looked past the soft hiring numbers. That’s partly because any signs of weakness increase the likelihood that the Federal Reserve won’t soon remove its unconventional economic stimulus, which has helped inflate stock prices.

“The U.S. markets have responded very well. . . . But we really need to see some top-line revenue growth” at companies, said Ian Kerrigan, a senior investment specialist for wealth-management company JPMorgan Private Bank in Seattle, adding that he doesn’t expect a big pullback by investors. “We do think the economy will continue to expand and the valuations (in stock prices) will continue to be justified.”

The Obama administration also looked past the weak numbers, saying the economy added jobs for the 41st straight month, and it called on Congress to avoid confidence-killing drama in coming negotiations to pass a new federal budget and raise the ceiling for government borrowing.

“With the recovery entering its fifth year, we need to build on the progress we have made so far and now is not the time for Washington to impose self-inflicted wounds,” Alan Krueger, the head of the White House Council of Economic Advisers, said in a statement on his last day in office. “The across-the-board budget cuts known as the sequester continue to be a drag on the economy now and in the future.”

Republicans wasted little time seizing on the weak jobs report.

“It is tough to find the bright spot in this report when the fact remains that the economy is still so weak that over half of the kids coming out of college today are either unemployed or underemployed,” Rep. Dave Camp, R-Mich., the chairman of the tax-writing House Ways and Means Committee, said in a statement shortly after the report was released.

Email: khall@mcclatchydc.com; Twitter: @KevinGHall

McClatchy Washington Bureau is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service