Businesses are cutting workers’ hours in a warning sign for the economy

Businesses are starting to cut workers’ hours, forcing hundreds of thousands of people into part-time roles, in what could be an early warning sign for the economy.

The number of people who worked part time, but want to work full time, rose by 452,000 in June, the biggest jump in more than three years, according to the Bureau of Labor Statistics. In all, 4.2 million people were employed part time for economic reasons beyond their control, a 12 percent increase from the month before.

Economists warn against making too much of a single data point, but say the latest spike in involuntary part-time work could be a harbinger of layoffs to come, especially when combined with other signs of slowing in the job market.

“Looking at this indicator — along with two straight months of decline in Black employment — gives me a bit of pause,” said Michele Evermore, senior fellow at the Century Foundation and former deputy director at the Labor Department. “I don’t mean to be Chicken Little here, but this does tend to be a leading indicator that things are starting to slow down.”

Employers add 209,000 jobs in June, a slow but steady gain

In interviews with nearly a dozen people whose employers recently shortened their hours, all said it was the result of slowing sales. Most worked in service jobs — fast-food joints, grocery stores, hair salons — where schedules can be easily redrawn to keep up with demand. But in at least two instances, office workers said drops in revenue had forced their employers to shorten workers’ hours across the board.

“As a company we aren’t doing as well as we were this time last year,” said Liv Roach, who works at a sustainability nonprofit in New York where most full-time employees were recently downgraded to part-time. “Our nonprofit’s income is dependent on larger companies, and they’re starting to pull back. People keep saying recession fears are being assuaged, but no, recession fears are still very much here.”

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