Economist wary of unemployment rate’s drop to 7.8 percent, with hiring minimal and big gains recorded among young workers taking part-time, low-paid positions.“The trend in the unemployment rate is beginning to look like the stall at about 8.2 percent from May to August is over — but the fact that the jobs data doesn’t show the same pattern makes you wonder what’s really going on,” said Philip L. Harvey, an economics law professor at Rutgers School of Law–Camden. “It might be enough to indicate a downward trend in unemployment, but it’s a little hard to explain, because employers aren’t telling us where those jobs are.”
Harvey said one bright spot in the monthly employment data was the previous two months’ dismal job numbers were revised upward, as 86,000 more jobs were created in August and July than Labor first reported.
But even with those revisions, employers have only added 146,000 jobs a month on average in 2012, which lags behind the previous year’s pace of 153,000 jobs a month, Labor said.
In September, the public sector added 10,000 jobs, mostly at the state education level, which slightly increased the total U.S. nonfarm employment gain to 114,000 jobs.
But Harvey said “most of the increase in employment is concentrated in the 16- to 19-(year-old) age population finding involuntary part-time jobs, so the job growth news is not as good as we would want it to be.”
“The data shows three times as many youthful workers joined the work force, and three times as many actually found work … in what we can safely assume are low-paid jobs,” Harvey said. “That could be an indicator of things beginning to pick up — with companies hiring part-time workers before expanding their business — or a sign of weakness that employers are transforming full-time jobs into part-time jobs. Either thing is possible, but we won’t know what’s really happening until we get more data.”
In light of young workers comprising the largest slice of employment growth, Harvey said the September jobs data is perplexing because the traditionally low-wage hospitality and retail industries added 20,400 jobs in September, while high-paying sectors saw elevated or similar gains, like education and health services, which added 49,000 jobs; transportation and utilities, with 25,000 jobs; and financial activities, with 13,000 jobs.
Still, the high-skilled manufacturing sector again recorded the steepest employment drop, as employers in the industry shed 16,000 jobs. As a whole, the goods-producing sector decreased payrolls by 10,000 jobs in September.