July 9, 2013

President Obama’s Part-Time Economy

Last Friday’s jobs report showed the unemployment rate unchanged at 7.6 percent for June 2013. Job creation continues to be below what we should have nearly four years after the end of the recession.

“Real” Unemployment

  • The number of people working part time for economic reasons (sometimes referred to as involuntary part-time workers) increased by 322,000 to 8.2 million in June. These people were working part time because their hours had been cut back or because they were unable to find a full-time job.
  • The “real” unemployment or U-6 rate is 14.3 percent for June 2013, an increase of 0.5 percentage points. This is the total percentage of unemployed and underemployed workers.
  • The “real” number of unemployed Americans is 22.6 million. These are people who are unemployed (11.8 million), want work but have stopped searching for a job (2.6 million), or are working part time because they can’t find full time employment (8.2 million).

Employment

  • While the economy added 195,000 jobs in June, the rate is insufficient to replace the millions of jobs lost in the recession. According to the Wall Street Journal, even with our recent job gains, the severity of the 2007-2009 recession was so great, the recovery needs to be stronger. 
  • Concern has been raised that despite positive reports in other areas of the economy, job growth continues to remain sluggish. In 2012, the economy added an average of 262,000 jobs a month. In 2013, the economy has added an average of 202,000 jobs per month, and employment growth has averaged 191,000 per month over the past 12 months.

Job Growth Is Steady but Insufficient

  • Employment increased in professional and business services (+53,000), leisure and hospitality (+75,000), retail trade (+37,000), health care (+20,000), financial activities (+17,000). Employment in manufacturing was similar to last month and government declined (-7,000). Within government, federal employment fell by 5,000.

Labor Force Participation

  • The labor force participation rate is 63.5 percent, up 0.1 from April, when it reached its lowest level since May 1979. If the labor force participation rate were the same as when the President took office, the unemployment rate would be 10.7 percent.
  • The share of American adults with jobs in May was 58.7 percent, roughly the same for more than three years. This is approximately five percentage points below its prerecession peak.
  • The number of long-term unemployed spiked to 45 percent in April 2010 and again in March 2011, and is currently 36.7 percent of the unemployed. During the 1980s, when our country faced a similar recessionary period, the proportion of long-term unemployed never exceeded 27 percent. 

Weeks, Hours & Wages

  • The number of Americans searching for work for more than 27 weeks is 4.3 million.
  • The average work week for private nonfarm employees was unchanged at 34.5 hours.
  • The average hourly private nonfarm payroll increased by 10 cents to $24.01. Year over year hourly earnings have risen just 2.2 percent. Consumer Price Index is up 1.4 percent.

Issue Tag: Labor