Latest Jobs Report Isn’t That GreatPaul-Martin Foss
Financial markets greeted last week’s jobs report enthusiastically. The final numbers came in at 209,000 jobs created, beating the expectations of 183,000. But while many people are seeing that as evidence that the employment situation continues to improve, digging deeper into the numbers shows otherwise.
Special: IRA, 401(k) & TSP Scam
Growth in Part-Time Jobs
The most concerning part of the jobs report is that most of the new job growth came from part-time workers. More than 393,000 part-time jobs were added last month. Full-time jobs actually fell by 54,000. That isn’t a good sign. Part-time jobs don’t offer the same job security or benefits that full-time jobs do. The reason for s
uch strong part-time job growth is unclear, but it could be a combination of factors. Health care expenses continue to increase, so many employers may try to hire more part-time workers to keep their health care expenses at a minimum. Or perhaps the economy really isn’t as strong as the pundits would like us to think it is, which is why full-time job growth is non-existent.
Most New Jobs in Restaurant Sector
Most of the new jobs created were in the restaurant and bar sector, meaning that the economy is creating a lot of waiters and bartenders. While those may be great stepping-stone jobs for those looking to break into the workforce and gain experience, or good jobs to hold someone over while looking for a real job, they aren’t careers. But more and more people are coming out of college unable to find a substantive job and are forced to take whatever they can get. That continuous growth in bar and restaurant jobs, nearly eight years without a drop in waiter and bartender employment, doesn’t bode well for the long-term health of the economy.
White Collar Jobs Grew Too
Almost as many jobs were created in professional and business services as in restaurants and bars. Unfortunately, those were mostly at the lower end of the scale, in administrative and temp services. That indicates that there’s still a significant amount of uncertainty about the direction of the economy. If you don’t know how strong the economy will be in a few years, or even a few months, why hire new full-time employees? Just hire temps. And that’s what many companies are doing.
The only other sector that made any real gains was healthcare. Most of the job growth there is driven by government-initiated demand. Now that health insurance companies have to provide insurance to everyone, more people are using more health care services than previously. The job gains in the health care sector may therefore only be temporary.
Overall the job numbers don’t paint a very good picture of a strong economy. Backbone sectors such as mining and manufacturing haven’t seen much growth, nor have important areas of the service sector. An economy that relies on temporary workers and waiters for job growth is one that isn’t doing to remain healthy over the long term. There are only so many restaurants and bars that can be built before people have their fill. Until job growth starts to pick up in productive sectors of the economy, be very skeptical when you read about how the employment situation in the United States has improved.