The US economy added 288,000 payroll jobs in June 2014 and the unemployment rate fell to 6.1 percent, but the share of the labor force working part time rose

1. Economics for your Classroom from
Ed Dolan’s Econ Blog
US Unemployment Falls to New
Low on Strong Job Gains;
Part-time Work Increases
July 4, 2014
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2. Unemployment Hits New Low of 6.1 Percent in June
 The US unemployment rate fell to 6.1
percent in June 2014, a new low for the
recovery. The unemployment rate is the
ratio of unemployed persons to the labor
force.
 The labor force grew by 81,000, adding to
gains in May. The number of unemployed
workers fell by 325,000 and the number of
employed increased by 407,000
 The unemployment rate is based on a
monthly survey of households
July 4, 2014 Ed Dolan’s Econ Blog

3. Broad vs. Standard Unemployment Rate
 The BLS also provides a broader
measure of job-market stress, U-6
 The numerator of U-6 includes
 Unemployed persons
 Marginally attached persons who
would like to work but are not looking
because they think there are no jobs,
or for personal reasons
 Part-time workers who would prefer
full-time work but can’t find it
 The denominator includes the labor
force plus the marginally attached
 U-6 fell to 12.1 percent in June, a
new low for the recovery
July 4, 2014 Ed Dolan’s Econ Blog

4. Long-term Unemployment Falls to Low for Recovery
 The recession and slow recovery
have been characterized by unusually
high levels of long-term
unemployment
 The share of unemployed out of work
for 27 weeks or more fell to 32.8
percent in June, a new low for the
recovery
 The median and mean duration of
unemployment also decreased for the
month
July 4, 2014 Ed Dolan’s Econ Blog

5. 288,000 New Payroll Jobs
 The BLS conducts a separate survey
of payroll jobs based on employer
records. According to that survey,
payroll jobs grew by 288,000 in June
 Job gains for April and May were
revised upward by a total of 25,000
 The 866,000 jobs added in the second
quarter of the year was the largest
quarterly gain in more than two years
 Job gains were spread broadly across
goods, services, and government
July 4, 2014 Ed Dolan’s Econ Blog

6. Part-Time Work Rises Sharply in June
 The percentage of the labor force
working part time (fewer than 35
hours per week) increased sharply
in June, reversing a gradual decline
over the course of the recovery
 The data show part-time work, not
part-time jobs. A person working 35
or more hours per week at two or
more part-time jobs is counted as a
full-time worker
July 4, 2014 Ed Dolan’s Econ Blog

7. Voluntary vs. Involuntary Part-time Work
 The majority of part-time work is
voluntary, or “for noneconomic
reasons” in official terms, e.g.,
because of childcare, school, or
partial retirement
 Involuntary part-time workers work
short hours because employers have
cut their hours due to slack business
conditions or because they can only
find part-time jobs, even though they
would prefer to work full time
 Involuntary part-time work is a
component of the broad
unemployment rate, U-6
 Both voluntary and involuntary part-
time work increased in June
July 4, 2014 Ed Dolan’s Econ Blog

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