Last week, the Bureau of Labor Statistics’ monthly jobs report showed a modest rise in the unemployment rate, 315,000 jobs were added to the economy and wage growth slowed somewhat. These are all signs that the hot labor market that has been frustrating the Federal Reserve may be beginning to calm down.
The jobs report is always jam-packed with data, so we didn’t get to it last week: “involuntary part-time workers” aka “people who are ’employed part-time for economic reasons’ aka “I’d prefer a full-time gig, but I can find none.” As of August, just over 4 million Americans fit this category.
When we want to measure the pulse of the labor market, we often look at the overall unemployment rate. But this number doesn’t tell us everything.
“Any measure has to be pretty crude, right?” said Cornell economist Erica Groshen, who used to run the Bureau of Labor Statistics. “The unemployment rate counts as employed if you worked at least one hour in the reference week.”
Even when these people would have preferred to work a full 40 hours but were prevented from doing so “either because the employer couldn’t give them the normal number of hours or because they couldn’t find a full-time job themselves,” Groshen added.
The level of involuntary part-time employment gives us a sense of how much untapped or untapped potential there is in the labor market, according to Elise Gould, senior economist at the Economic Policy Institute.
“If that number is lower” — as it has been in recent years — “it means there are more opportunities and fewer people making an effort to get extra hours,” Gould said.
That’s good news for workers, who have many options and additional leverage over employers, Gould said.
For some companies, this is a sign that staffing for the holiday season won’t be easy, said Daniel Zhao, chief economist at hiring site Glassdoor.
“There are many jobs that help support the annual holiday season, whether they’re retail workers, truck drivers or warehouse workers,” he said.
Last year almost 1 million seasonal and often part-time jobs became vacant ahead of the holidays. This year, “we should continue to expect that filling these positions will remain very difficult,” Zhao said.
If the number of involuntary part-time jobs does increase, Zhao said it would be a leading indicator of a slowing economy.
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