by Mike "Mish" Shedlock - Prairie Grove, Ill.
Economists were surprised by the massive "beat" in Friday's reported job numbers.
The unemployment rate dropped 0.2 percentage points to 7.7% and the economy allegedly added 236,000 jobs.
But is that what really happened? Not really.
According to the household survey (on which the unemployment rate is based), the economy added a healthy 170,000 jobs.
The survey also shows a tremendous increase of 446,000 part-time jobs.
What this means is that the economy actually shed 276,000 full-time jobs.
The Bureau of Labor Statistics labeled those 446,000 part-time jobs as "voluntary,” but I am not so sure.
Read more: Why the unemployment rate is so misleading http://www.marketwatch.com/story/why-the-unemployment-rate-is-so-misleading-2013-03-08
A Gallup survey on jobs released Thursday shows the percentage of
workers working part time but wanting full-time work was 10.1% in
February,
an increase from 9.6% in January and the highest rate measured since January 2012.
Gallup notes "Although fewer people are unemployed now than a year ago,
they are not migrating to full-time jobs for an employer.
In fact, fewer Americans are working full-time for an employer than were
doing so a year ago, and more Americans are working part time.
Although part-time work is clearly better than no work at all, these are
not the types of good jobs that millions of Americans are still
searching for.
‘Obamacare effect’
Obamacare is in play. Recall that under Obamacare, the definition of
full-time employment is 30 hours. The BLS cutoff is 34 hours.
At 30 hours, companies gave to pay medical benefits so they have been slashing the number of hours people work.
This reduced the number of hours people worked and provided an incentive for many to take on an extra job.
We can see the effect in actual BLS data.
After declining for years, the percentage of those working two or more jobs is again on the rise.
In the past month there was a surge of 679,000 in the number of people working multiple jobs.
The seasonally-adjusted increase was 340,000.
One can look at the data two ways.
Either the economy is getting better and more jobs are available,
or people are working more jobs because their hours were cut and they need a second job.
Evidence suggests more of the latter than the former.
Look out below
The reported 236,000 surge in the establishment survey is not real.
It will be revised away. Here’s why:
In the household survey one is either working or not, thus multiple jobs do not distort the reported unemployment rate
(although there are many other distortions such as the participation rate and declining labor force).
The establishment survey, however, is distorted by people working multiple jobs.
A surge in multiple-job workers would artificially hike the baseline number.
I expect revisions later — huge downward revisions.
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