U.S. Jobs Market Looking Great on the Surface Only
Just recently, the U.S. Bureau of Labor Statistics (BLS) released the U.S. jobs market report for the month of December.
In the report, BLS said that during the month, 148,000 jobs were added to the U.S. economy and the unemployment rate stood at 4.1%. (Source: “Employment Situation Summary,” Bureau of Labor Statistics, January 5, 2018.)
To begin, here’s what readers need to know: the 148,000 number was much lower than what was expected by economists at big banks. The average forecast was for 190,000 jobs during the month of December.
Staggering Number of Part-Time Workers…
Here’s the thing: Job numbers coming below expectations wasn’t the only problem. It’s very important to pay attention to the details.
Sadly, when you do just that, you instantly see that the problems in the U.S. jobs market remain persistent.
Understand that the number of Americans working part-time because they can’t find full-time work remains staggering. In December, the number of Americans working part-time stood at 4.9 million.
But this isn’t all. Look at the number of Americans working at more than one job as well. In December, there were about 7.7 million Americans who had multiple jobs. Look at the chart below, it depicts the number of Americans with multiple jobs.
(Source: “Multiple Jobholders,” Federal Reserve Bank of St. Louis, last accessed January 5, 2018.)
Since the U.S. economy entered the so-called “recovery” stage, this figure continues to increase.
With this, one really has to ask: Are Americans working more than one job because they don’t get enough money at their primary job? It’s very possible.
Menial Wage Increase in 2017
Finally, look at the wages.
If you follow the news, we are told on a daily basis that the U.S. jobs market is hot. Sadly, if wages are any indicator, then the jobs market is far from hot.
Look at the chart below. It shows the hourly wage of American workers.
(Source: “Average Hourly Earnings of All Employees: Total Private,” Federal Reserve Bank of St. Louis, last accessed January 5, 2018.)
If you just look at the trend on the chart, it’s not enough. Look closely at the dollar-per-hour figures as well.
In the entire year of 2017, wages increased by just $0.48.
Simple math here, if we assume the average American works 160 hours in the whole month, their wage only increased by $76.80 per month. Unfortunately, $76.80 doesn’t really go that far these days. Those who actually go out and shop will agree with this.
Dear reader, it’s very important to keep a close eye on the U.S. jobs market. It’s a leading indicator of the U.S. economy.
When American workers struggle with jobs, the economy struggles. Don’t forget that the U.S. economy is very dependent on consumer spending. If Americans aren’t earning enough money to pay for their expenses, will they go out and buy the things they want? It’s very unlikely.