Inside the employment report: Tough times for teens and part-timers, but the healthcare sector keeps hiring
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The economy lost a net 51,000 jobs last month, which was fewer than the 75,000 many analysts expected. Still, the unemployment rate rose to 5.7% from 5.5% in June, and the average workweek declined.
Although the labor market clearly isn’t collapsing the way the economy’s doomsayers had anticipated, the details inside the July employment report don’t hold out much encouragement, either.
Some of the highlights (all data are seasonally adjusted):
--- A drop in the average workweek, by 0.1 hour to 33.6 hours, the lowest since November 2004: ‘The drop in the workweek suggests that firms have cut hours instead of cutting jobs,’ says Robert Brusca, head of Fact and Opinion Economics. ‘If the weakness continues, history suggests that deeper job cuts will come next. The cyclically sensitive ‘temp jobs’ already have been cut back sharply.’
--- Tough times for teens: The jobless rate for teens jumped 2.2 points to 20.3% last month, the highest rate since October 1982, notes David Resler, economist at Nomura Securities. The rate was 15.3% a year earlier. ‘The July jump in the [federal] minimum wage rate appears to have had the predicted impact on teen employment: The higher required rate enticed more teens into the job market to search for a smaller number of jobs on offer,’ Resler said.
--- More part-timers who’d like to be full-timers: The number of people working part time for ‘economic reasons’ -- because they needed the money -- rose by 308,000 to 5.7 million in July and is up 1.4 million, or 33%, in the last 12 months. As the government notes, ‘This category includes persons who indicated that they would like to work full time but were working part time because their hours had been cut back or they were unable to find full-time jobs.’
--- Broad-based job losses: Just 41.2% of the industries surveyed reported increases in payrolls in July, according to Goldman, Sachs & Co.’s tally. The previous low this year had been 41.4% in February.
--- We’re exporting more stuff but employing fewer to make it: Manufacturing employment fell by 35,000 jobs in July to 13.5 million, bringing losses in the last 12 months to 383,000. One bright spot: the machinery sector, which added a net 6,100 jobs last month, to about 1.2 million.
--- Contractors led losses in the construction sector: Total construction employment fell 22,000 in July to 7.17 million. The net loss since the September 2006 peak: 557,000 jobs, with nearly three-quarters of the decline occurring since last October. Most of the July employment decrease was from the loss of a net 20,000 positions among specialty trade contractors in both the residential and nonresidential sectors.
--- Despite the credit crunch, the financial sector held its own: Employment in the financial services business, which includes real estate service jobs, was flat at 8.2 million. But over the last year the industry has shed a net 118,000 jobs. The securities business lost 1,000 jobs in July, but employment in that sector actually has grown by 14,000 in the last year to 865,200. (Maybe we’re losing stockbrokers and investment bankers but gaining commodity traders?)
--- Healthcare and mining still are hiring: The healthcare sector posted a net gain of 32,900 jobs to 13.3 million, lifting the total increase in the last 12 months to 368,000. If you can’t get work at the local hospital, try your local mine or oil field: The mining sector, which includes oil and gas drilling, added 10,300 jobs in July, to 720,000, and has gained 222,000 positions since reaching a low in April 2003. Most of the mining-sector job additions owe to hiring by the energy industry, the government says. There’s one upside to $4.50-a-gallon gas.
--- Government jobs remain a bright spot -- but for how long? Total government employment (federal, state and local) rose 25,000 to 22.5 million. All of the net gain was at the state and local level. But as budget woes increase because of falling tax revenue (welcome to California!), states and municipalities should find it tougher to add positions, and may instead have to shed jobs.