PPACA boosts labor-force slack as Fed contemplates rate rise

There were 563,000 workers so discouraged by job prospects in May that they weren't even looking for work, the fewest since October 2008. They represented about 0.36 percent of the labor force, closing in on the 0.27 percent average for the period from 1994 through 2007, and suggesting there is less room for further improvement here.

That apparently wasn't the case for involuntary part-timers, who totaled 6.65 million in May, or 4.2 percent of the labor force compared with an average 2.9 percent for the 14 years through December 2007, when the last recession began. That remains significant, which is why Yellen and her colleagues say they want to go slow. Reduce the part-time total by Feroli's estimate, however, and the gap is a little less daunting.

Because it's probably influenced by the Obama administration's PPACA, some portion of that gap will persist even when the labor market has fully healed, Feroli wrote. 

See also: For employers, PPACA smog thickens

Feroli went on to say that he's not making any value judgments on PPACA's efficacy. It could be that the benefits of the law outweigh any costs from the distortions to the workweek, he said. It could also mean that employers are hiring more workers than they normally would, just keeping them under 30 hours a week. In other words, companies may be hiring three people part-time to do the work of two full-time staff.