Share story

WASHINGTON — The July government employment report released Friday showed the job market treading water.

And a closer look at one of the two measures the Labor Department uses to gauge employment suggests part-time work accounted for almost all the job growth that’s been reported over the past six months.

Employers added a weaker-than-expected 162,000 nonfarm payroll jobs in July, according to the Establishment Data Survey, which relies on reporting by a large sample of businesses.

The unemployment rate is measured by the separate Household Survey, and it fell two-tenths of a percentage point to 7.4 percent, its lowest level since December 2008. That’s due, in part, to slow growth in the labor force. The jobless rate is based on a sample of self-reporting from ordinary people across the nation, and it’s the Labor Department measure that shows a very troubling trend in hiring.

“Over the last six months, of the net job creation, 97 percent of that is part-time work,” said Keith Hall, a senior researcher at George Mason University’s Mercatus Center. “That is really remarkable.”

Hall is no ordinary academic. He ran the Bureau of Labor Statistics, the agency that puts out the monthly jobs report, from 2008 to 2012. Over the past six months, he said, the Household Survey shows 963,000 more people reporting they were employed, and 936,000 of them reported they’re in part-time jobs.

“That is a really high number for a six-month period,” Hall said. “I’m not sure that has ever happened over six months before.”

The Establishment Data Survey provides the headline-grabbing hiring number that’s most cited in news media, but it doesn’t distinguish between part-time and full-time work. Similarly, the Household Survey doesn’t say whether the part-time workers have found new jobs or represent workers whose employers have shifted them from full time to part time.

Both surveys provide estimated snapshots of hiring because it’s impossible to track every hire and job loss in real time.

“There is something going on if such a large share of the hiring is part time,” Hall said.

He said the overall share of part-time jobs to all jobs, 19 percent, wasn’t a problem — yet.

Hall speculated that the implementation of the Affordable Care Act, short-handed as Obamacare, might be resulting in employers shifting workers to part-time status to avoid coming health-care obligations.

“There’s been so much talk about the effects of Obamacare on part-time work,” he said. “This is such an unusual thing to see.”

By most measures, Friday’s jobs report disappointed. Mainstream economic forecasters had projected a number closer to 200,000 in the Establishment Data Survey, in part because of good economic-growth numbers for April through June earlier in the week. Statisticians also revised downward the strong jobs numbers from May and June, suggesting that hiring in the first half of the year averaged about 192,000 a month, near where it was last year.

“Can’t help but be let down,” said Scott Anderson, the chief economist for San Francisco-based Bank of the West. “Nonfarm job gains were mediocre at best in July, and combined with the … downward revisions for May and June, the job-creation performance remained less than inspiring.”

Professional and business services and the leisure and hospitality sectors continued to grow, but at a slower pace, adding 36,000 and 23,000 jobs, respectively. Surprisingly, hiring in the usually robust health-care sector slowed to a trickle, at 2,500 new jobs.

The job market “isn’t as soft as last month’s data suggest,” said Mark Zandi, the chief economist for forecaster Moody’s Analytics. “Looking at the data over the past several months shows that the job market is slowly but steadily improving. …

“New homebuilding is coming back to life, but it has yet to translate into more construction and other housing-related jobs. That should change in coming months, as housing activity ramps up.”