Job growth points to economic rebound, but part-time numbers cause concern


WASHINGTON — America’s hiring spree swung into full gear in June as the economy added more than 200,000 jobs for the fifth month in a row, according to government data released Thursday.

The streak is the longest since the late 1990s and provides evidence that the recovery has rebounded after unexpectedly shrinking during this year’s harsh winter. The Labor Department reported 288,000 net new jobs were created in June, and the unemployment rate dropped to 6.1 percent.

“We’re achieving escape velocity,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank. “It’s all there for some real strength.”

The data helped propel Wall Street to another record high Thursday, with the Dow Jones industrial average closing above 17,000 for the first time. In Washington, President Barack Obama cheered the recovery’s progress during a visit to a tech incubator.

“It gives you a sense that the economy has built momentum, that we are making progress,” he said. “And it should be a useful reminder to people all across the country that given where we started back in 2008, we have made enormous strides.”

The job gains were spread across a range of sectors, indicating the recovery is broad-based. Leading the way was professional and business services, which added a net 67,000 jobs. Retail and food service were next, while manufacturing and financial services also enjoyed significant gains.

But there’s a gnawing fear among some economists that the improving data may provide false comfort. The number of people in part-time jobs jumped by more than 1 million in June to 27 million, according to the government’s data. That has led to worries that the workforce may be becoming permanently polarized, with part-timers stuck on one side and full-time workers on the other.

“What we’re seeing is a growing trend of low-quality part-time jobs,” said Carrie Gleason, director of the Fair Work Week Initiative, which is pushing for labor reforms. “It’s creating this massive unproductive workforce that is unable to productively engage in their lives or in the economy.”

The government defines part-time workers as those whose jobs average less than 35 hours a week. Historically, they made up about 17 percent of the workforce — and, in most cases, they worked part time by choice. They may be caring for family members, enrolled in school or simply uninterested or unable to work more hours.

But the spike in part-time work since the recession has been largely involuntary. These workers may have had their hours cut or are unable to find full-time jobs, earning them the official designation of “part-time for economic reasons.” In June, their ranks swelled by 275,000 to 7.5 million. In 2007, 4.4 million people fell into this category.

Chicago resident Anna Pritchett is thankful to have a job. The 65-year-old was unemployed for about a decade before landing a part-time position in maintenance at Wal-Mart 21/2 years ago. She makes $9.55 an hour and usually works 32 hours a week.

Pritchett would take on even more hours if it were an option. But the company was only looking for part-timers, she said.

“That’s what they offered, so that’s what I took,” she said. “I gotta take what I can get.”

Influential economists such as Federal Reserve Chair Janet Yellen have pointed to people in Pritchett’s position as a sign that the labor market is still far from healed, despite the recent impressive job growth.

Yellen is troubled by the large number of people who have been out of work for more than six months. Their ranks dwindled in June to 3 million, but they still remain well above the historical average and represent about a third of the unemployed. Meanwhile, more than half a million people have given up looking for a job altogether — though some economists hope the stronger job market could bring them back into the fold.

Yellen has argued their return could slow the decline in the unemployment rate. But the longer that workers are out of a job, the less likely it becomes they will ever find one.

That dynamic could leave the Federal Reserve in a bind. It is in the midst of phasing out its trillion-dollar bond-buying program and is starting to debate when it should raise short-term interest rates, which stand at zero. The Fed has been treading carefully for fear of undermining the recovery or disrupting the markets.

But as the unemployment rate continues to fall, an increasingly vocal chorus of critics contends that the central bank may have waited too long to tighten policy. It is already at the level that the Fed had predicted it would land at the end of the year.

“I would say the Fed is really behind the curve,” LaVorgna said.

The progress of the job market could also influence the outcome of the midterm elections, if only because Americans tend to reward the president’s party for improvements in the economy. But Republicans say the White House is premature to celebrate at all.

“We’re glad to see some Americans found work last month, but we can’t rest until jobs are easy to find. That’s why Republicans have passed dozens of jobs bills in the House of Representatives,” Republican National Committee Chairman Reince Priebus said in a statement. “Sadly, Democrats in Washington, DC, have other priorities.”

The rhetorical war is likely to intensify this summer with battles over reauthorizing the Highway Trust Fund, which is used to maintain roads and other infrastructure and is in line to run out of funding, and the Export-Import Bank, which Democrats say helps preserve manufacturing jobs against foreign competition and say Republicans would like to end.

“My frustration about the current state of play stems from the fact that we could be growing at such a faster clip if we would simply enact measures such as the infrastructure bill and emergency unemployment benefits,” Labor Secretary Thomas Perez said in an interview.