NEW YORK ( TheStreet) -- Forecasters expect that the Labor Department on Friday will report the economy added 175,000 jobs in August and the unemployment rate remained steady at 7.4%. That would be in line with the pace of recent months; recent jobs gains, however, have been heavily weighted toward part-time positions.
Since January, 936,000 additional Americans have reported 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 retailing 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 (SBUX) 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%.In the second quarter, gross-domestic-product growth was 2.5% due to an increase in business inventories, stronger exports and weaker imports. The boost from stronger U.S. sales abroad and fewer imports isn't 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 can't grow forever; in the end, consumers and business investment must pick up the slack. Despite greater optimism as expressed by consumers and small businesses in sentiment surveys, initial readings for third-quarter consumer spending are quite weak, and growth in industrial production and manufacturing, as tracked by the Federal Reserve, has slowed. Consequently, economic growth may be expected to slide back to about 2% in the second half. The protracted delay in determining appropriate U.S. military action in Syria has added to uncertainty and pushed up oil and gasoline prices. That will drag on consumer spending, business investment and jobs creation in the third quarter.
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