The Employment Situation

Although the July employment report was weaker than expected, it was still in line with recent experiences. The household survey reported employment gains of 204,000 while the payroll report showed a gain of 162,000 jobs.

Average hourly earnings for all employees on private nonfarm payrolls edged down by 2 cents to $23.98, following a 10-cent increase in June.

The average workweek for all employees on private nonfarm payrolls decreased by 0.1 hour in July to 34.4 hours. In manufacturing, the workweek decreased by 0.2 hour to 40.6 hours, and overtime declinedby 0.2 hour to 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls decreased by 0.1 hour to 33.6 hours. Hours worked fell below the trend of 0.2% monthly experienced so far in this cycle.

The combination of weak average hourly earnings and a drop in hours worked meant that average weekly earnings was very weak.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged at 8.2 million in July.

Parttime employment as a share of total employment rose from 18.8% to 18.9%. Many are arguing that the rise in part time employment is due to Obamcare. Maybe, but it is not an open and shut case.  The series is highly volatile and can be heavily influenced by which sectors are growing.  For example, if manufacturing employment is weak and retail employment is strong it will generate an increase in part time work because manufactures use few part-timers while retailers rely heavily on part-timers.   Many CEOs are reporting that they will expand part time work to avoid the cost of providing health insurance.  Interestingly they all seem to be in the leisure & hospitality industry that has always relied heavily on part time employment.  The average work week in leisure and hospitality is about 25 hours that means the average employee in this industry is already a part time worker. Saying that expanded part-time work in leisure and hospitality  is due to Obamacare is much like reporting that the sun rose in the east and blaming  it on Obamacare.