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The number of Americans who want to work full time but are forced to work part time fell in June to its lowest level in more than 20 years, according to federal data released Friday, underscoring the strength of the labor market and bargaining power of workers.
There were 3.6 million workers “employed part-time for economic reasons” in June, down 707,000 from the previous month, according to the US Department of Labor’s monthly jobs report.
This is the lowest level since August 2001, according to historical data compiled by the Federal Reserve Bank of St. Louis.
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The Department of Labor classifies individuals as “part-time employees for economic reasons” if they prefer full-time employment but are forced to work part-time because their employer cuts their hours or they cannot find work. full time position.
“We’ve seen a pretty dramatic decline, and I think that’s a very healthy sign for American workers,” said Daniel Zhao, senior economist at career site Glassdoor.
Before the pandemic, the number of involuntary part-time workers fell below 4 million on two other occasions in the past two decades – in July 2019 and in March and April 2006, according to the Federal Reserve Bank of St. Louis.
A strong labor market
The drop follows other federal labor data released Wednesday showing that employers’ demand for workers remains near historic highs, meaning the momentum is tilting in favor of employees.
Job postings and the rate of people leaving their jobs at the end of May were near the highs set in March, and layoffs remained near all-time lows. Meanwhile, wages have risen at the fastest rate in decades as employers compete for talent.
“I think this is a case of employers recognizing that they can’t afford to just have a bunch of part-time workers because they’re going to lose them to full-time opportunities,” said Zhao about the drop in involuntary part-time work. timers.
“Given the choice, many of these part-timers will find better opportunities elsewhere,” he added. “So naturally employers are under pressure to offer full-time hours to part-time workers.”
The June decline also comes as the overall labor market remains a bright spot for the U.S. economy despite fears of a recession on the horizon, economists said.
Businesses added 372,000 jobs last month, beating expectations and continuing a strong recovery in the pandemic era.
If the current job growth trajectory continues, the United States would fully recover the 22 million jobs lost during the pandemic era in August. The private sector fully recovered to its pre-pandemic baseline in June, which US Labor Secretary Marty Walsh hailed on Friday morning as a “major step.”
The unemployment rate also remained at 3.6% in June, unchanged for four consecutive months and just above its rate of 3.5% in February 2020 – which, in turn, was the highest unemployment rate. low since 1969.
However, it is unknown if and how long the force will persist. The Federal Reserve is trying to cool the economy by raising borrowing costs for consumers and businesses, in an effort to rein in stubbornly high inflation. Central bank policymakers predicted last month that the jobless rate would edge up, to 3.7%, by the end of 2022 and 4.1% in 2024.