Two tales on “blowout” jobs report

There appear to be two different stories in the Septemeber jobs report. One reported by companies, and another reported by individuals and they tell very different stories about the economy. The first one is the one that is making all the headlines: 336,000 new jobs added.

This number is calculated by looking at company payrolls. On net, companies added 336,000 combined employees. On the surface, this seems great for anyone who was looking for a job. It also seems bad for anyone who doesn’t want the fed to raise rates more. More jobs means strong economy means more inflation means higher rates. But there is a second way that jobs are calculated, and this one surveys individuals instead of employers. It’s called the household survey. This report shows that only 89,000 jobs were added this month.

So where is the disconnect? And why are these numbers so different? Multiple jobs. When one person has two jobs, that looks like 2 employees when you look through the eyes of the payrolls. But it’s the same person working at two different companies. Far from a sign of a growing job market and strong economy, this is a sign of severely struggling individuals. The larger the difference between the payroll survey and the household survey, the more people are working multiple jobs. Is there any further evidence this is happening? Yes. Take a look at total job force participation: it is completely unchanged. All the job changes taking place are just the same employees swapping jobs. There was no net change in the total number of people working.

Further, look at full-time employment numbers. Over the last 3 months, full time employment is down 692,000. This makes the multiple jobs numbers even worse – people are working more jobs, but only part time. This means more people are going without benefits like healthcare and 401k. Struggling to pay for a rising cost of living, and fewer people contributing to retirement accounts. While it’s a small impact to markets overall, it still means less money being invested.

In summary, if you look at all the jobs data together, it suggests more people are working multiple jobs. This is a sign of struggling households, not economic strength.


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