The July Jobs report from the Bureau of Labor Statistics unveiled a headline unemployment number that edged down slightly to 7.4 percent as the economy added 162,000 jobs. In spite of the decrease in the overall unemployment estimate, the report does not paint a bright picture for the jobs market. A forecast of economists by Bloomberg had predicted an increase of 185,000 new jobs.
Buried in the report, the Civilian Labor Force Participation Rate actually fell from 63.5 to 63.4 percent as job creation did not keep pace with population growth. According to BLS historical statistics, the rate reached a recent high in January 2007 at 66.4 percent before the onset of the recession. The rate has continued to decline during Barack Obama’s presidency from 65.7 percent in January 2009.
It might seem inconsistent that the labor participate rate declined at the same time that the unemployment rate fell. The answer can be found in the report’s measure of discouraged workers, people who are “not currently looking for work because they believe no jobs are available for them.” The number of discouraged workers rose sharply to a total of 416,000. The 136,000 increase in discouraged workers who dropped out of the workforce is almost equal to the number of workers who found jobs. The U-4 unemployment rate which adds discouraged workers to the headline unemployment rate is at 8.0 percent.
More bad news is that the number of workers who hold part-time jobs increased as well. This includes workers who work part-time for economic reasons such as the inability to find full-time work or declines in demand as well as those who work part-time because of noneconomic commitments such as family or school. These workers are considered “marginally attached” to the workforce. The U-6 unemployment rate which includes both discouraged and marginally attached workers is 14 percent.
As more part-time workers entered the work force, the average work week shortened to 34.4 hours, 0.1 hours shorter than June. The average work week for production employees was even shorter at 33.6 hours. Similarly, earnings for all employees fell by $3.09 and for production employees by $2.02.
Overall, the Yahoo News noted that 65 percent of the new jobs were part time. The industries with the largest numbers of new jobs were in low-paying sectors such as retail (47,000) and restaurants and bars (38,000). Professional and business services also added 36,000 new jobs.
One reason for the increase in the rate of part-time jobs created is the Affordable Care Act. New employment taxes in Obamacare encourage companies to avoid hiring full-time workers that will be subject to the provisions of the health care law that is scheduled to go into full effect in 2014.
Fifty-two percent of the unemployed have been out of work for more than 15 weeks. Thirty-seven percent have been unemployed for more than 27 weeks.
A final item in the report notes that employment figures for May and June were lower than previously estimated. These numbers were revised down by a total of 26,000 jobs.
Originally published on Atlanta Conservative Examiner.
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