Friday, forecasters expect the Labor Department to report the economy added 175,000 jobs in August and the unemployment rate remained steady at 7.4 percent. Although in line with the pace of recent months, jobs gains have been heavily weighted toward part-time positions.
Since January, 936,000 additional Americans report working part-time, while only 27,000 more say they have obtained full-time positions. The shift to part-time workers, partially a reaction to Obamacare health insurance mandates, puts downward pressure on wages and benefits in low-paying industries, like retail and restaurants, and widens income inequality.
Expectations of permanently slower growth are hardening disturbing changes in the structure of the labor market and social conditions. These days, new college graduates often work at unpaid internships while taking part-time jobs at places like Starbucks to meet minimal living expenses. And they are putting off marriage and childbearing, which also drags on consumer spending and growth.
Adding in discouraged adults, who have quit looking for work altogether, and part-timers who want full-time employment, the unemployment rate becomes 14.0 percent.
In the second quarter, GDP growth was 2.5 percent, owing to an increase in business inventories, stronger exports, and weaker imports.
The boost from stronger U.S. sales abroad and fewer imports are not expected to continue because of China’s resurgent manufacturing and Japan’s policy of targeting the U.S. auto industry and other manufacturers with an artificially cheap yen.
Inventories cannot grow forever, and in the end consumers and business investment must pick up the slack.
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