What US Employers are Looking for: The Demand for Part-Time Workers

In recent times, companies have shown a growing preference for part-time workers over full-time employees. According to a recent analysis of job postings on the site Indeed, demand for full-time workers has remained flat from January 2022 to May of this year, while advertisements for part-time gigs have increased by about 10% over the same period. This shift in hiring patterns has been significant, with part-time job postings soaring in 2022 and maintaining elevated levels ever since. While full-time employment still dominates on Indeed, the rise in part-time opportunities is a notable trend.

The trend of hiring part-time workers has also been reflected in hiring activity, with part-time employment increasing by 8.9% in May compared to a 1.5% increase in full-time employment during the same period, according to data from the Labor Department. This shift in the labor market dynamics could potentially signal a turning point, which is closely monitored by the Federal Reserve as it considers the timing of interest rate adjustments in response to inflation concerns.

San Francisco Fed President Mary Daly highlighted the evolving job market landscape at a recent event, emphasizing the potential implications of a slowdown in the labor market. As the economy cools and businesses adjust their workforce needs, the balance between full-time and part-time employment is shifting, with implications for both employers and workers.

Despite these changes, the overall US job market remains robust, although there has been a slight cooling over the past year. The unemployment rate in May crept up to 4%, ending a period of exceptionally low levels that had persisted for more than two years. Additionally, the number of new applications for unemployment benefits has been trending upwards, indicating a potential increase in layoffs.

The Indeed report suggests that the rise in part-time opportunities could be driven by a combination of factors, including competitive pressures to attract workers in a tight labor market and economic considerations as the economy adjusts. Industries such as beauty and wellness, personal care, retail, food service, and sports have been among the most likely to advertise part-time work, reflecting the diverse range of sectors experiencing this shift.

Historically, part-time work has seen fluctuations in response to economic conditions. During the Great Recession from 2007 to 2009, part-time employment rose sharply, while the opposite was true during the recovery from the brief recession in 2020. The current increase in part-time opportunities aligns with broader economic trends and changing workforce dynamics.

In addition to shifts in employment patterns, recent data on inflation and consumer spending provide further insights into the state of the economy. In May, prices in the US remained stable, contributing to a slowdown in inflation levels. Falling gas prices and cheaper goods helped to offset price increases in other categories, leading to a more balanced inflation outlook.

Looking ahead, upcoming economic indicators and events will provide further clarity on the state of the economy. Key releases include business surveys gauging economic activity, inflation data, job market figures, and earnings reports. These data points will be crucial in understanding the ongoing shifts in the labor market and broader economic trends as businesses and policymakers navigate evolving conditions.