You will hear on the news that the economy continues to add jobs and the unemployment rate was unchanged in June. Sounds OK. It is true, strictly speaking. But, the check engine light is on.
The most widely followed unemployed rate stayed the same at 7.6% and almost 200,000 new jobs were added. That’s the good news.
The bad news is that the vast majority of the gains were in low-paying service jobs and part-time employment. In fact, last month, according to the government’s Household Survey, there were 240,000 FEWER full-time jobs reported while 360,000 more part-time jobs were reported. In the last two months, the economy has seen the ranks of the unemployed increase by 118,000. Why is that not on the news?
Companies were probably hiring part-timers without benefits to keep total employment costs low. Some were likely looking to avoid the Obamacare penalty for not covering workers. The announcement that the penalty enforcement period would be pushed back all the way to 2015 came just recently, too late to affect this report.
Also, U6, the broadest measure of unemployment that the government reports and which is not subject to the same problems as the headline number actually rose by a whopping 1/2% in June! That’s a huge jump in the wrong direction. That U6 figure, which includes people working part-time who want full-time work and also people who have just given up looking for work, two categories that are not counted in the headline unemployment number is the number I follow. Unfortunately, it is seldom mentioned by the media.