Every month, the unemployment report is released. Almost every month, analysts find some good news and some bad news in the details.
In the latest report for September, the good news was that the unemployment rate dropped to 4.8% from 5.2% in August. The bad news was the rate fell because about 338,000 individuals left the labor force. This means they are not interested in working right now.
The number of workers leaving greatly exceeded the number of new jobs created. In September, just 194,000 new jobs were added to the economy. That’s the lowest number since December 2020 and down 46% from the number of jobs added in August.
Unemployment Report Shows a Steady Decline in Part-Time Work
While the good news and the bad news capture headlines, there are also surprises included in every unemployment report. Among those is the fact that the long-term trend in part-time employment is dropping.
Part Time Work Since 2012
Source: Federal Reserve.
A popular storyline is that there are no good jobs available. Corporations focus on their bottom lines and hire part-time workers to avoid paying benefits. The data tells a different story and has been every month for more than ten years, as the chart above shows.
The monthly employment report includes the number of workers who are working part time but would like to find full-time work. In September, there were 975,000 workers in that category. That’s a 65% decline in ten years.
Companies have been hiring more full-time workers for years. The popular story that there are only part-time jobs available hasn’t been true for some time. It may be true in some cases, but the data shows that companies are struggling to find enough full-time workers.
While there will always be surprises in the employment report, there will always be good and bad news. The best way to analyze it is to focus on whether the good news outweighs the bad news.
In the latest report, good news significantly outweighs the bad news, and that should mean the economy will remain on the right track.
Michael Carr is the editor of True Options Masters, One Trade, Peak Velocity Trader and Precision Profits. He teaches technical analysis and quantitative technical analysis at the New York Institute of Finance. Follow him on Twitter @MichaelCarrGuru.
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