The Truth About Full-Time vs. Part-Time Jobs
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Following the June employment report, negative stories about the economy proliferated. Here is a sampling of headlines:

"US jobs report shows growth in part-time, low-wage work"

"The Full-Time Scandal of Part-Time America"

"June jobs report is great for part-time workers, not so much for full-time"

In one sense these headlines spoke "a" truth. According to the Household Survey of employment, part-time jobs increased a whopping 799,000 in June, while full-time jobs fell. So, if all you did was isolate June data, the case against the economy creating meaningful jobs was pretty darn easy.

The problem is that monthly employment statistics, especially from the household survey, are incredibly volatile. For example, just two months earlier, in April, part-time jobs were down 398,000 while full-time jobs were up 412,000! In other words, please be careful when playing with these statistics.

As the table above shows, most jobs added in this recovery have been full-time jobs. In 2013 alone, 1.5 million full-time jobs were added while 188,000 part-time jobs were lost.

June was what statisticians call an outlier. If we look at the first five months of 2014, January through May, total jobs rose 1.23 million, while part-time jobs fell 153,000. And, during the twelve months ending in June, total jobs are up 2.15 million, with only 10,000 of them being part-time.

In other words, focusing solely on June data is a misdirection. According to Bureau of Labor Statistics data, total part-time jobs were 19.2% of all jobs in June 2014. Back in 2009, total part-time jobs averaged 19.5% of all jobs.

And, just to be clear, we do believe that Obamacare and other regulatory actions, higher taxes and more government spending in the past decade have created a less dynamic economy and more part-time jobs. We just don't agree with spinning one month's worth of data into an entire world view. It's not appropriate, it's a misuse of data and it's probably politically motivated rather than any attempt to get a handle on the real economy.

The July data will be released this Friday. We expect it to show about 220,000 new jobs according to the Payroll Survey. We would forecast the same for the Household survey, but no one forecasts the household survey. It's just too volatile. We can't promise that it will reverse the June data on the part-time front, but we expect it to.
Posted on Wednesday, July 30, 2014 @ 12:28 PM

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.