A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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Oct 25 2016

More Workers Need Multiple Jobs

The Fed continues to push the notion that the job market is “improving,” as Chairman Yellen described it last month, but that is an overly generous portrayal. Indeed, household employment growth has been largely flat since the spring, and nonfarm employment growth is just above a 40-month low (not shown). Furthermore, the weak household employment growth is being boosted by the trend we highlighted nearly two years ago of multiple jobholders accounting for a disproportionate share of job gains.

From July to September, single jobholders (Chart, lighter teal area) have declined by 51,000, but multiple jobholders (darker teal area) have increased by half a million workers, which is more than the 451,000 jobs added in this two-month period, according to the Household Survey. Over the last six months, the number of single jobholders has risen by 251,000, while the number of multiple jobholders has increased by 397,000, representing over 61% of the gains.
Obviously, this is an outsized contribution from multiple jobholders, given that they make up just 5.2% of the workforce – a half-percentage-point increase from its share in January 2014. With disproportionate growth in the ranks of multiple jobholders, it is clear that this “improving job market” is increasingly bereft of jobs that provide a living wage. Instead, more workers are finding it necessary to cobble together a living with second and third jobs, which, while available, are not indicative of a truly healthy labor market.

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