The demand for part-time jobs in the United States saw a significant increase of 8.9% in May 2024 compared to January 2022. This rise sharply contrasts with the more moderate growth of 1.5% observed in full-time employment during the same period, according to current data from the Labor Department.
The employment landscape indicates a growing trend of appreciation for part-time employees by companies. According to a detailed analysis of millions of job postings on the Even website, the demand for full-time employees remained relatively stable between January 2022 and May 2024. In contrast, the number of ads for part-time positions increased by about 10% during the same period.
The surge in part-time job offers began to stand out significantly in 2022, and this high level has been maintained since then. Despite this growing trend, full-time employment continues to be the most commonly offered form of work, as described in the Even report.
This phenomenon may reflect a change in the needs and strategies of companies that are increasingly seeking flexibility and diversity in their workforce composition.
The Federal Reserve is considering the right timing for its first interest rate cut after raising borrowing costs to their highest level in the last 23 years to combat inflation. Mary Daly, president of the Federal Reserve Bank of San Francisco, spoke last week at a Commonwealth Club World Affairs event in California about recent changes in the labor market and their potential future implications.
Daly emphasized that the labor market has gradually adjusted so far, with the unemployment rate showing only a moderate increase. This change in hiring behavior could reflect broader adjustments in the economy, which the Fed is closely monitoring as it evaluates its next monetary policy actions.
Mary Daly warned that the current trendline in the labor market may be approaching a turning point. “But we are nearing a point where this favorable outcome could become less likely,” said Daly. She added that “a future weakening of the labor market could result in a rise in unemployment as companies need to adjust not only positions but also actual jobs.”
Although the U.S. labor market remains robust, it has shown signs of cooling in the past year. The unemployment rate rose to 4% in May 2024 after remaining exceptionally low for over two years. This increase reflects a scenario where the dynamics of supply and demand for labor are changing.
Additionally, the number of new unemployment claims, a key indicator of layoffs, has shown an upward trend in recent weeks. Ongoing claims, which reflect the number of people continuing to receive benefits, reached their highest level since November 2021 last week.
In April, the latest government data indicated there were 8.1 million job openings. While this number is still significant, it represents a considerable decline from the record 12.2 million in March 2022.
These developments could influence the Federal Reserve’s decisions regarding monetary policy as the central bank weighs the right timing for its first interest rate cut after raising borrowing costs to the highest level in the last 23 years to control inflation. Changes in the labor market structure and the rise in unemployment are critical factors that the Fed considers in its ongoing evaluation of the economy.
The latest Even report suggests that the increasing prevalence of part-time jobs could signal both a weakness and a strength for employers, highlighting the growing uncertainty in the labor market. The analysis proposes two possible interpretations for this trend:
First, it could indicate that employers are losing interest in the costs associated with hiring full-time employees. In an increasingly competitive labor market, some companies may offer part-time jobs to attract workers and provide the flexibility that many seek.
Second, this change could reflect a response to economic needs. With the cooling economy and declining demand for hours worked, employers might adjust their job offerings to fit this new economic reality. The outcome for workers is clear: there is a growing supply of available part-time positions that meets the demand for greater flexibility.
According to the report, the sectors most likely to offer part-time positions starting in May include beauty and wellness, personal care and home health care, retail, food preparation and service, and sports.
These sectors show a significant trend towards more part-time opportunities, possibly in response to the needs of the workforce and changes in economic conditions. The report emphasizes the importance of this flexibility for both employers and employees in a changing work environment.
During the Great Recession from 2007 to 2009, there was a notable increase in part-time employment, as highlighted by a study from the Federal Reserve Bank of San Francisco. This pattern reversed during the recovery from the 2020 recession when the economy and labor market underwent a robust recovery.
Daniel Culbertson, the economist who prepared the Even report, noted that there was an increase in part-time employment as the economy and labor market began to recover from the pandemic. This phenomenon suggests that economic conditions and hiring trends can significantly influence the distribution of part-time jobs across various economic phases.
In May, prices in the U.S. remained unchanged, providing welcome relief for consumers and helping to bring inflation back to normal levels. The Personal Consumption Expenditures (PCE) price index, a closely monitored inflation indicator by the Federal Reserve, has remained stable since April, slowing to 2.6% in the 12 months ending in May, compared to 2.7% in the previous month, according to data released on Friday (28th) by the Commerce Department.
The overall slowdown in inflation was driven by a 2.1% decline in gas prices for the month and a 0.4% drop in the prices of cheaper goods. These factors contributed to the easing of inflation. On the other hand, food prices saw a modest increase of 0.1%.
Excluding the volatile sectors of energy and food, the core PCE price index rose only 0.1% for the month. This adjustment led to a slowdown to a new three-year low of 2.6%, compared to 2.8% in the previous month.
The report released on Friday met market expectations. In addition to inflation data, the monthly income and expenditure report from the Commerce Department provides critical information on how Americans earn, spend, and save, offering a comprehensive insight into the economic health of American households.
