'Forced' Part-Time Employment Increases

by: John Lounsbury

The DOL (U.S. Dept. of Labor) calls the category "Part-time for Economic Reasons". I call it forced or involuntary part-time. These are people who have had their hours cut by their employer or have been able to find only part-time work when they were seeking full-time.

The number surged in March to 9.1 million, just shy of the record level of 9.2 million last October. Here is a graph from Calculated Risk:

For larger image click here



It is not easy to rationalize this data.

In the last two months, involuntary part-time employment has increased by 738,000. See Table A-8. This implies that either (1) more people who were already employed have been reduced to part-time status or (2) part-time positions are being added to payrolls.

The first possibility would indicate continued hard times for employment. The second possibility would indicate that the employment picture is starting to improve.

Both situations may be occurring in parallel, but since the average weekly hours worked is unchanged in March from January, the second possibility seems more likely. However, I cannot dismiss the possibility that the changes we are looking at here are at the noise level.

This thought is reenforced by the following graph:



This graph implies that the entire discussion may be about noise. The 3-month moving average and its quadratic trend line are consistent with the monthly data being polluted by statistical noise.

Source: Employment Situation Report, April 2, 2010

Disclosure: No stocks mentioned.