For many skeptical observers, the big employment theme for this year has been an assertion that new jobs were of low quality and mostly part-time. This theme resonated with those who want to disparage economic growth, including sellers of political themes, gold, page views, fear, and related (high-commission) products.
All of these sources pounded the drum when part-time employment was high – ignoring and dismissing the obvious seasonal effects.
What about now? After the delayed release of the September employment numbers, what did you read about part-time employment?
The answer is --- nothing. Sherlock would call it a "dog not barking." This is business as usual in the investment world.
The Breaking News You Did Not Hear
What was the real news? The seasonal part-time effects have reversed. If you have joined us in following Bob Dieli's work, you would get this chart and explanation:
"Quick show of hands: How many of you heard that there were 691,000 full-time jobs created in September? Another quick show of hands: How many you remember hearing that there were 360,000 part-time jobs created in June?"
Resulting in this (chopped inexpertly from his report) –
This is exactly what Bob has been predicting. You need to subscribe to get his complete reports, but mention this post and I think he will give you a free month or two. You will quickly learn the value of his accurate and insightful commentary and also enjoy his humor.
I highlighted his part-time employment analysis in August, when Bob got our Silver Bullet award for refuting analysis from John Mauldin and Charles Gave. The most recent evidence shows that he was right, but don't hold your breath waiting for the mistaken sources to back off!
The only other source I find that even mentioned the part-time reversal is Doug Short. Here is his chart:
It is pretty obvious from this chart that the part-time story is based upon the recession, not anything that has happened after 2009. We hope that Doug's commentary will soon catch up with the evidence.
As usual, I warn against confusing your political viewpoints with your investment decisions. This is such a case. The coalition of the naysayers has used the part-time argument to convince everyone that employment growth is very weak and the economy is heading into a recession. When the data refutes their prior arguments, they have nothing to say.
Personally, I think there is some tendency to part-time employment from ObamaCare, but the effects are vastly overstated. If you look at all of the jobs involved, few businesses are at the margin. There are plenty of anecdotes, and I do not question them. The program could have a better design. Any "hard" threshold invites such issues.
In my investing, I dismiss such issues when the impact is small. So should you.
Most importantly: Beware of sources that shift indicators to suit their purposes!!