The July Jobs Report is out showing unemployment (U3) fell to 7.4% based on meager jobs growth of 162,000 jobs, declining new jobless claims and individuals exhausting their unemployment benefits without finding work (the latter don’t count as unemployed under the U3 measurement). I expect the job growth numbers to be revised slightly upwards next month, but they will fall far below the 80,000 new job opportunities required each month simply to keep up with new entrant growth and 90,000 needed to absorb the unemployed. Here’s a short video on the implications for hiring based on the report.
The real story, however, continues to be the grinding conversion of a significant portion of the labor force to part-time work status. The Obama Administration loves to crow about the 953,000 jobs created in 2013, but I would be crying. The above chart (hat tip Tyler Durden at Zero Hedge) shows that 77% of all jobs created this year through July were part-time. Several prominent economists dismiss this data saying the part-time growth is a natural pre-cursor to full-time job growth. They may be right, but my bet is that this is structural.
Here are the indicators I am paying attention to:
- Temporary labor is booming; many companies in this industry are on pace for a near record year.
- Dining sector (whose job volume dwarf manufacturing jobs) are managing attrition to convert the bulk of their workforce to part-time (c.f. White Castle).
- New family formation as measured by average age of marriage, average age of giving birth, and first-time home purchase. Average age of marriage for some college educated continues to climb into high twenties as does the age at which females in the cohort have first birth. First home buying by this cohort has collapsed.
If you want an idea of what society and the workplace look like at the end of this trail, take a look at Italy, land of empty playgrounds, closed schools, and 32 year old males living in their parent’s basements who for some reason, don’t strike the Italian women as prime marriage material.
We remain in deep and treacherous waters, and HR Pros are going to have their hands full keeping their employer’s ship from foundering.