Economix Blog: Signs of Hope on Jobs, and Some Caveats

With as dismal a run as we’ve had in the economy over the last few years, it’s tempting to start looking for the glass to be half full.

After a traumatic late summer and fall, the economy showed some signs it was sputtering back with holiday sales strength and three months of steady – if uninspiring – job growth.

Hopes are rising for signs of accelerating job creation in Friday’s Labor Department report, following a decline in the four-week average of new unemployment claims and a strikingly robust report of job growth from ADP, the payroll service. ADP said on Thursday that the private sector added 325,000 jobs in December, the strongest increase in a year.

Without trying to knock the glass over, we have to point out that many economists consider the ADP numbers less than predictive.

“Its track record is spotty (and that characterization is being polite),” Tom Porcelli, senior United States economist at RBC Capital Markets in New York, wrote in a research note.” ADP often revises its numbers, and historically, December’s numbers have been subject to fairly wide swings.

Government forecasts, of course, can change as well, so perhaps Friday’s number will come with a dollop of salt, too.

That said, there’s another reason to be less than ecstatic about the jobs that are being created.

As my colleague Floyd Norris has pointed out, manufacturing has actually been a standout, generating a net gain of 302,000 jobs – or about 13 percent of the total — since American employment hit its recent low in February 2010. But about a third of all jobs created in that period have been in relatively low-paying sectors like retail, leisure and hospitality, and home health care.

And temporary help services account for 356,900 jobs – about 15 percent of all new jobs added since the trough.

Another number that has some economists dispirited is the number of people who are working part time because they cannot secure a full-time position. That number has remained stubbornly high. In November, it was 8.5 million, more than double what it was before the recession.

“A lot of firms have learned to hire and find people who are willing to work part time,” said John Silvia, chief economist at Wells Fargo. And he said that this is “not simply a short-term temporary thing, but it’s become much more permanent.”

Article source: http://feeds.nytimes.com/click.phdo?i=17af8a9330e5aa3af223ac30c1618da3