The latest report numbers exceeded expectations but showed a huge increase in part-time employment as the number of full-time jobs suffered.
The total number of Americans employed in full-time jobs dropped 22,000 for the month of September, from around 134,189,000 to 134,167,000, while the total number of part-time workers increased 151,000 from 27,185,000 to 27,336,000, according to data from the Bureau of Labor Statistics. The U.S. added 336,000 nonfarm payroll jobs in September while unemployment remained at 3.8%, far exceeding expectations by economists that the U.S. would add 170,000 jobs. (RELATED: Debt-Laden Companies Are Headed Toward Doom As Interest Rates Take Their Toll)
More Americans are taking part-time jobs and even second or third jobs to make ends meet as real wages decline following a period of high inflation. Real wages have sunk 2.1% from the beginning of President Joe Biden’s term in 2021 to the second quarter of 2023, according to the Federal Reserve Bank of St. Louis.
TLDR: people supplementing incomes w/ part-time jobs are goosing the headline numbers while underlying economic fundamentals remain weak; people absent from workforce pushing down unemployment rate; earnings not keeping up with inflation; don’t expect the job gains to last… pic.twitter.com/ceAoWZ7IPc
— E.J. Antoni, Ph.D. (@RealEJAntoni) October 6, 2023
The increase in jobs for September was led by the leisure and hospitality sector at 96,000, followed by government jobs at 73,000 and food services at 61,000, according to the BLS.
Inflation remained elevated at 3.7% for August, further degrading wages, after peaking at 9.1% in June 2022. To fight inflation, the Federal Reserve has raised the federal funds rate to a range of 5.25% to 5.50%, after a series of 11 hikes starting in March 2022.
Jerome Powell, chair of the Fed, indicated at the Jackson Hole Economic Symposium in August that the federal funds rate could be hiked even further if inflation remains high, the jobs market is hot or there is sustained economic growth. U.S. Gross Domestic Product, a measure of economic growth, remained elevated at 2.1% for the second quarter of 2023, following its third estimate in September after being revised down from 2.4%.
Americans are also facing the costs of higher debt as interest rates rise, with the total amount of debt held by U.S. households reaching an all-time high of $17.06 trillion in the second quarter of 2023. Around $1 trillion of that debt is held in the form of credit cards that Americans are turning to in order to finance expenses as real wages fall.
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