November employment

As no doubt you have already heard from numerous sources, the BLS reported this morning that employment rose by 321,000 in November with the unemployment rate staying at 5.8%. The increase was well over the 243,000 that economists had forecast. According to BLS, “Job gains were widespread, led by growth in professional and business services, retail trade, health care, and manufacturing.”
The number of involuntary underemployed (part time for economic reasons) continued to decline ever so slightly in November. The decline was due completely to a drop in those part time because of slack work. The number of those who could only find part time work remained the same as last month.
As I’ve noted before, the total involuntary underemployment remains well above pre-Great Recession levels. This high level of involuntary underemployed constitutes a waste of human capital. Last month, the WSJ looked more closely at the pat-time workers (Why Are So Many Workers Still Part Time? Seven Charts). The story points out that the improvement in involuntary underemployed is concentrated in manufacturing and construction. There has been little decline in involuntary underemployment in the retail/whole trade and leisure/hospitality sectors. While these sectors are traditionally heavily part-time, it appears that we may have reached a “new normal” in these industries. The Great Recession seems to have created a structural shift in part time work. The story dismisses one common explanation for this, “empirical data doesn’t yet show a big increase in part-time work that could be attributed to the health care law.” But the story give no other explanation. Clearly more work is needed to address this problem.

Involuntary underemployed Nov 2014.png

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