More Americans are moving from part-time to full-time jobs, adding to evidence a strengthening labor market will bolster household confidence and spending.
The number of people putting in a full week rose to 113.8 million in December, the most since February 2009, the Labor Department’s monthly employment report showed last week. At the same time, 8.1 million worked fewer hours because they couldn’t find a full-time job, the least since January 2009.
“It’s what will traditionally happen when the job market overall is beginning to improve,” Tig Gilliam, chief executive officer of Adecco Group North America, said in a telephone interview.
While the jobless rate fell 0.5 percentage point over the past three months, going from 9 percent to 8.5 percent, the so-called underemployment rate, which includes part-time employees who’d prefer a full-time job, dropped by 1.2 percentage points to reach 15.2 percent. The gain in hours and earnings resulting from a full-day’s work will probably help sustain consumers.
“By moving into more permanent positions, you get a more productive workforce,” said Michael Gapen, a senior U.S. economist at Barclays Capital Inc. in New York. “It makes labor more valuable and that means moderate wage growth, even with the unemployment rate at 8.5 percent. That translates into better consumption momentum entering this year.”
Stocks rose as German Chancellor Angela Merkel and French President Nicolas Sarkozy discussed plans to shore up the euro. The Standard & Poor’s 500 Index climbed 0.1 percent to 1,279.08 at 9:34 a.m. in New York.
Germany’s economy, meantime, may be stalling. A report today showed industrial production in Europe’s largest economy fell 0.6 percent in November from a month earlier.
In Australia, retail sales were little changed in November from a month earlier, when they rose 0.2 percent, the Bureau of Statistics said in Sydney today.
Adecco, headquartered in Melville, New York, is a division of Glattbrugg, Switzerland-based Adecco SA, the world’s largest supplier of temporary workers. Gilliam said his industry “is still seeing double-digit growth in permanent placements and conversions” from part-time and temporary to full-time employment. “When the market gets that much better, the direct hiring accelerates even more,” he said.
Payrolls increased by 200,000 workers in December and the 8.5 percent jobless rate was the lowest since February 2009, last week’s Labor Department figures showed.
Beatrice Barry, a 37-year-old single mother, said her new full-time job enabled her to brighten the holidays for her two daughters.
“It’s a good feeling to have the financial security,” said Barry, who found full-time work in November at the Society of Nuclear Medicine in Reston, Virginia. “This year was a stellar holiday shopping year for me. I was able to buy a couple of larger-ticket items.”
Barry, who had been working part-time for the American Industrial Hygiene Association, said she needed a full-time job to support her children.
The improvement in the labor market is prompting some economists to boost growth forecasts for 2012. The world’s largest economy will grow at an average 2.1 percent annual rate in the first half of the year, up from a prior estimate of 1.8 percent, according to new estimates issued Jan. 6 by economists at Bank of America Corp. in New York.
“Over the last several weeks, U.S. economic data has almost universally surprised to the upside,” Neil Dutta, a Bank of America economist wrote in a Jan. 6 research report. “The employment report is a case in point.”
Nonetheless, the economy will probably slow in the second half of the year as the threat of tax increases and government spending cuts, political gridlock over the federal debt and a recession in Europe hurt U.S. growth, Dutta wrote.
The number of people working part time for economic reasons fell by 1.17 million in the past three months, the biggest decline over a similar period since early 1994, figures from the Labor Department show. That brought the underemployment rate for the group to 5.2 percent, the lowest since January 2009.
The rise in full-time employment contributed to other gains in December. Average hourly earnings rose 0.2 percent to $23.24, and the average workweek increased by six minutes to 34.4 hours, according to the Labor Department.
“We’re going to see one of the bigger increases in earned income,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh.