Commuters and tourists exit a subway car on May 26, 2022 in New York City.
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More Americans were working part-time and temporary jobs last month, which could herald future changes in the shape of what today appears to be a robust job market.
Hiring in July easily exceeded expectations, suggesting a strong labor market despite other signs of economic weakness. But an increase in the number of workers in part-time positions for economic reasons – usually due to reduced hours, poor business conditions or because they cannot find full-time work – portends potential instability. coming.
The Bureau of Labor Statistics on Friday reported that the number of such workers, called “involuntary part-time workers,” rose by a seasonally adjusted 303,000 in July to 3.9 million. This follows a sharp drop of 707,000 in June.
The metric, which is volatile, is still below the 4.4 million involuntary part-time workers recorded in February 2020, before the Covid-19 pandemic upended the job market.
The number of full-time workers fell by 71,000 during the month, while part-time workers, both voluntary and involuntary, increased by 384,000.
July’s increase was not due to a lack of full-time jobs. Compared to the June report, July saw fewer workers who could only find part-time work. Instead, according to the report, workers were forced into part-time positions due to reduced hours and unfavorable business conditions.
The report indicates movement in the “wrong direction,” according to Julia Pollak, chief economist for ZipRecruiter, and could signal a coming recession.
At the same time, employment in temporary help services showed signs of expansion, increasing by 9,800 in July, more than double the increase of 4,300 in June.
They are workers temporarily hired to take on additional work and are often the first to be laid off when employers brace for tougher economic times, according to Pollak. Growth in this metric, she said, could be a reassuring sign for the economy.
The conflicting indicators could reflect a divergent economy where some industries are struggling more than others, according to Erica Groshen, former commissioner of the Bureau of Labor Statistics and current senior economics adviser at Cornell University.
Another possibility, she said, is that strong hiring earlier in the month led to companies pulling out to correct.
“Towards the end of the month, we had people who had their hours reduced,” she said.
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