More Americans Working Part-Time; Unemployment Declines

Oct. 5 (Bloomberg) -- TCW Chief Global Strategist Sri Kumar discusses the unemployment rate. He speaks with Pimm Fox on Bloomberg Television's "Taking Stock." (Source: Bloomberg)

Britt Zaragoza is among a growing number of part-time workers in a U.S. economy that is simultaneously experiencing slowing growth and declining unemployment.

The 48-year-old single mother found employment as a receptionist at a Columbus, Ohio, law firm in August after searching for two years. Not working a full day gives her the flexibility to take care of her 10-year-old son and pursue a career in catering.

“I knew sooner or later something would come up and thank God it did,” she said. “It was the perfect hours that I was looking for so I jumped on it real quick.”

Joblessness unexpectedly fell to 7.8 percent in September, the lowest since President Barack Obama took office in January 2009, from 8.1 percent, according to Labor Department data issued today in Washington. Falling unemployment, as job gains exceed labor-force growth, means more people are earning paychecks, which in turn may boost the consumer spending that accounts for about 70 percent of the economy.

“You’d rather have full-time than part-time employment for sure, but a job is a job,” said Ray Stone, managing director of Stone & McCarthy Research Associates in Princeton, New Jersey. Still, “if it’s part-time for economic reasons it takes some of the benefit away.”

Some 582,000 more Americans, the most since February 2009, were working part-time last month because of slack business conditions or because those jobs were the only work they could find, according to Labor Department estimates.

Student Workers

At the same time, the number of people who voluntarily decided to take a part-time position climbed to 18.6 million in September from 16.9 million the prior month, according to Stone’s calculations. The jump could be explained by students taking part-time jobs at the beginning of the school year after having worked full-time during the summer recess, he said.

The jobless rate for teenagers dropped 0.9 percentage point to 23.7 percent from 24.6 percent the previous month, today’s report showed.

Because part-time workers are typically the first to be fired when economic conditions worsen, the gain in these types of jobs takes some of the shine off the drop in joblessness, said Neil Dutta, head of U.S. economics at Renaissance Macro Research LLC in New York.

“It’s an employment recovery built on thin ice,” said Dutta. “If there was an immediate downturn or even a weakness heading into the end of the year, who’s going to be the first one to go?”

The jump in employees who are unable to find full-time jobs is what one would expect in an economy that is growing less than 2 percent at an annual rate, Dutta said. Gross domestic product expanded at a 1.3 percent pace in the second quarter after growing 2 percent in the first three months of the year, according to figures from the Commerce Department.

Part-time staff also receive fewer benefits. About 24 percent of these employees have access to medical benefits compared with 86 percent of full-time workers, according to data from the Bureau of Labor Statistics.

Some of the jump in employees working part-time may be due to cutbacks in the hours of full-time workers. Jonathan Bethly, 26, of Dunwoody, Georgia, said his hours as a cook at a restaurant and sports bar have been slashed by about half, from 40 hours a week. He’s recently started to look for a late-night or overnight shift to supplement his pay.

“My hours gradually started coming down, and they have really come down,” he said. “I need to find another job. I am in desperate need for a couple checks.”

Today’s figures showed the so-called underemployment rate - - which includes those part-timers who’d prefer a full-time position and people who want work but have given up looking -- held at 14.7 percent.

To contact the reporter on this story: Michelle Jamrisko in Washington at mjamrisko@bloomberg.net; Elizabeth Dexheimer in Washington at edexheimer@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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