Fewer Americans must settle for part-time jobs for lack of full-time work, and factory overtime is on the rise, indicating the pace of payroll gains reported by the Labor Department today is sustainable, economists said.
The number of people working part-time for economic reasons fell for a fifth month in February to the lowest level since January 2009, the Labor Department said today in Washington. Factory workers put in an average 4.2 hours of overtime last month, the most in more than three years.
“There is only so much overtime you can make your workers work before you have to add,” employees, said John Canally, an economic strategist at LPL Financial Corp. in Boston. “Some of the nitty gritty” of today’s Labor Department report “does point to future gains in coming months.”
Employers in the U.S. added 192,000 workers in February, the most since last May, the report showed. Private payrolls grew by a more-than-forecast 222,000, and the jobless rate unexpectedly declined to 8.9 percent, the lowest level since April 2009.
Factory overtime is rising as manufacturers ramp up production in response to rising global and domestic demand. Overtime rose to an average of 4.2 hours in February for production workers, the most since July 2007. Manufacturing, which accounts for about 11 percent of the U.S. economy, has added 112,000 jobs in the last four months.
Intel Corp., the world’s largest chipmaker, is among companies planning to increase payrolls. The Santa Clara, California-based company announced plans to build a $5 billion plant in Arizona and hire 4,000 employees in the U.S. this year. Intel is stepping up production to satisfy renewed demand for chips following the recession.
The number of people working part time for economic reasons fell to 8.34 million in February from a peak of 9.51 million in September. The decline suggests that part-time workers are moving into full-time positions, said Ellen Zentner, a senior U.S. economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York.
Such figures bode well for job growth overall, said Harm Bandholz, chief U.S. economist at UniCredit Global Research in New York.
“We think we’ll be adding about 200,000 jobs per month this year in total,” he said. “The indicators that are getting less attention are showing the same direction” as the payrolls numbers.
The economy needs to generate about 210,000 jobs a month on average to bring the unemployment rate down by 1 percentage point a year, according to Mike Englund, chief economist at Action Economics LLC in Boulder, Colorado.
“We believe that we are in a continued positive economic recovery that will lead to positive labor growth over the course of the next couple of years,” Carl Camden, chief executive officer at temporary staffing provider Kelly Services Inc., said Feb. 24 at a conference in Boston. “We see strength in U.S. conditions.”
Today’s report contained other signs of improvement. The underemployment rate -- which includes people who have given up looking for a job as well as those who are working part-time for economic reasons -- decreased to 15.9 percent from 16.1 percent.
The report also showed a decrease of 217,000 in the number of Americans who have been without a job for 27 weeks or more. A measure of the share of industries showing job gains last month rose to 68.2, the highest since May 1998.
“Broad-spread job creation shows that job growth isn’t being driven by just a handful of industries,” Zentner said.
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