For the second month in a row, the news from the BLS on employment was basically good news. Employment increased by 290,000. Economist has expected job growth of 180,000 (according to the Dow Jones Newswire survey) or 190,000 (according to the New York Times). As important, March's figure was revised substantially upward to 230,000 (from the 162,000 reported last month). The piece of not-so-good news was that the unemployment rate increased to 9.9%. However, that was due to an increase in the number of people looking for jobs -- a sign of economic optimism.
That does not, however, explain the rise in involuntary underemployment. The number of people who could only find part time work was essentially the same as last month. The people working part time because of slack work, however, increased. Apparently companies are still cutting back in some areas. Slack work as historically been a coincident indicator -- so the increase in recent months is troubling.
Interestingly the number of voluntary part time workers continues to decline. As I discussed in an earlier posting, the number of people working part time for non-economic reasons had been essentially stable for almost 30 years. In March of 2007 it started to decline -- a decline that continued last month. I speculated before that this might be a labor market crowd out effect -- with those seeking part-time jobs for non-economic reasons (such as collage students) being pushed out of the labor force by those who can only get part-time jobs. But that is pure speculation and does not necessarily fit with the fact that the number of people who could only find part-time work was the same as last month. If there was crowding out, that number should have increased. Someone needs to look at this more closely.
That does not, however, explain the rise in involuntary underemployment. The number of people who could only find part time work was essentially the same as last month. The people working part time because of slack work, however, increased. Apparently companies are still cutting back in some areas. Slack work as historically been a coincident indicator -- so the increase in recent months is troubling.
Interestingly the number of voluntary part time workers continues to decline. As I discussed in an earlier posting, the number of people working part time for non-economic reasons had been essentially stable for almost 30 years. In March of 2007 it started to decline -- a decline that continued last month. I speculated before that this might be a labor market crowd out effect -- with those seeking part-time jobs for non-economic reasons (such as collage students) being pushed out of the labor force by those who can only get part-time jobs. But that is pure speculation and does not necessarily fit with the fact that the number of people who could only find part-time work was the same as last month. If there was crowding out, that number should have increased. Someone needs to look at this more closely.
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