Those watching tomorrow’s job report will be looking to the figures on part-time jobs, which have been the major contributor of overall job growth so far this year.
Last month, part-time jobs jumped by 174,000 to 28,233,000, according to the Bureau of Labour Statistics’ household study.
Some economists have pointed to the Affordable Care Act’s employer mandate as reason for the pattern. Because the government will require firms with over 50 employees to offer health insurance, companies have been scaling back hours to cut costs, the theory goes. Though, the White House said earlier this summer it would delay enforcement of the mandate until 2015.
Guggenheim’s Scott Minerd points to the potential problem with this trend:
Over the past seven months, the average monthly growth in full-time jobs has been 32,000, while the average number of new part-time jobs was 104,000. After falling from the recession peak of 20 per cent, the share of total jobs which are part-time has recently rebounded to 19.6 per cent. The increase in part-time jobs may be partially attributable to the upcoming change in health care laws, requiring employers to provide health insurance to full-time employees but not for part-time workers. If the trend continues, the increasing share of part-time workers may add downward pressure to aggregate labour earnings and reduce consumption growth.