U.S. August Jobs Report Preview: Economy Is Adding Jobs But Still Not The Best Ones

The number of Americans working part-time jobs because they couldn’t find full-time positions, though slowly falling, is still higher than it would be in a normal economy. That fact, and other data expected to be reflected in the employment figures to be released Friday, is often masked by otherwise good news in the headline unemployment rate.

In July, 7.5 million workers who wanted full-time work were in part-time jobs, compared to 8.2 million in July of last year and about 4 million in 2006, before the recession. The U.S. government’s August jobs report, due out Friday, is expected to show monthly job creation remaining above 200,000 for the seventh consecutive month. That suggests some sustained strength in the labor market, though many who are employed are still working fewer hours than desired and taking jobs beneath their skill levels.

“Jobs that would have been held by high school grads, those with a high school-only education, are now held by college grads,” boosting unemployment among the least educated, said Gary Burtless, a U.S. labor economist and senior fellow at the Brookings Institution. “In a normal job market, there would be stronger demand for all kinds of workers, including the least-skilled workers.”

Employment has picked up notably since March after an unusually harsh winter crippled economic growth in the first three months of the year. And the bright side is that, according to Gus Faucher, senior economist at PNC Financial Services Group, “Job growth should continue at a 200,000-plus pace through the rest of this year and into next.”

Though more Americans are employed, and that’s lifting the country’s economic output, many are working in jobs they’re overqualified for and haven’t seen their wages increase much faster than price levels in recent years.

That helps explain why nearly 60 percent of Americans say it's difficult to find a job in their area, according to Pew Research.

Most of the jobs added in August were in professional and business services, positions ranging from janitors to accountants, followed by jobs in retail, manufacturing and construction, a survey of the private sector by ADP indicated.

“The private sector hasn’t been a source of weakness, but a lot of optimism has sprung from public sector hiring,” Burtless said. “It’s a heck of a turnaround.”

For six successive months, local, state and federal governments averaged together have added 90,000 jobs, according to federal data. From 2009 to 2011, government payrolls shrank, and then remained relatively flat until 2013.

Personal incomes in July ticked up 0.2 percent from June, while inflation increased 0.1 percent over the same period, according to federal data. Few American workers aside from professions requiring high skills have seen real wage growth throughout the recovery.

Economists expect wage growth to accelerate and unemployment to drop from its current 6.2 percent to 5.7 percent over the next year, though they don’t expect much change in the number of people working or looking for jobs, already at the lowest level in decades, according to a Bankrate.com survey of nearly 30 leading economists. They also expect payrolls to expand at a monthly average of 219,000 jobs over the next 12 months, Bankrate.com surveyor Mark Hamrick said. In July, employers added 209,000 workers to payrolls.

“The good news: As the economy continues to show steady job growth, our data indicate strong incentives for Americans who had given up on the job hunt to take a second look, as employers are once again hiring for quality opportunities across a wide range of industries, skill levels and specializations," said Tara Sinclair, Indeed.com economist and professor of economics at George Washington University. "The odds are returning to the qualified job-seeker’s favor.”