The U.S. labor market has come a long way in recent years, but one key measure has barely budged — reflecting lukewarm wage gains as well as broader shifts in the economy. Multiple-job holders made up 5.1 percent of the total employed in August, and the share has been hovering around 5 percent since the expansion began in mid-2009.
That’s despite unemployment having plunged to 3.9 percent, an almost five-decade low and less than half the level seen in the immediate aftermath of the recession. Monthly hiring gains averaging 207,000 this year are well ahead of the 2017 pace, and the September payrolls report due Friday is projected to reinforce the strong demand for labor amid a shortage of qualified people.
Yet pay gains have been disappointingly moderate and employers slow to increase hours and benefits — the primary reason why workers continue to rely on a patchwork of jobs. Economists point out that the data also reflect cross-currents including the gig economy, educated people opting for the challenge of doing more, or younger workers seeking variety and a work-life balance.
“The labor market is not as equally tight across the country,” and the pickup in worker pay “hasn’t been strong enough,” said Ryan Sweet, head of monetary policy research at Moody’s Analytics Inc. in West Chester, Pennsylvania. At the same time, “by almost every metric the labor market is really strong,” which means “there’s a lot more opportunity for people.”
Typically, a declining share of multiple-job holders would be considered a good sign that more people are transitioning to regular positions with more benefits and better schedules. But the data are probably also capturing “something more structural” linked to the changing nature of the economy and demographics, said Sweet, who reckons this may help keep the trend fairly stable.
WHAT TO EXPECT FROM THE SEPTEMBER JOBS REPORT
Nonfarm payrolls rose est. 184k, after 201k gain
Unemployment rate fell to est. 3.8%, matching lowest since 1969
Average hourly earnings increased est. 2.8% y/y after 2.9%
Carl Riccadonna of Bloomberg Economics: “Hurricane Florence is poised to impact not only the pace of job creation in September and beyond, but if past is prologue it is likely to temporarily distort average hourly earnings and the average length of the workweek, as well”
Besides, there are plenty of indications the labor market is tightening. Job openings exceeded the number of unemployed people by the most on record in July. More recently, the tally of part-timers who’d prefer a full-time position has fallen to a post-recession low of 4.4 million.
The number of multiple-job holders fell to 7.9 million people in August, following a spike the prior month to a decade-high 8.1 million. Economists point out that the series is typically volatile, and hard to parse.
One of them is Komi Assogba, who’s been working two jobs for nearly 10 years. He’s a bellhop at the Crowne Plaza Hotel in Arlington, Virginia, and a barista at a Starbucks in Washington. The 58-year-old former chemistry teacher said he quickly needed a way to support his family after moving to the U.S. from France in 2009 but lacked U.S. certification for education.
Dylan Williams, 22, a full-time student pursuing a master’s degree in public health at George Washington University, earns about $475 a week before taxes from two minimum-wage jobs at a coffee shop and co-working space in the nation’s capital. That helps him cope with the “outrageous” cost of living in Washington and save toward his student-loan payments, he said.
What Markets Are Watching
The August jobs report showed an unexpected acceleration in wages that spurred a selloff in bond markets, eventually pushing the benchmark 10-year yield back above 3 percent in September. On Wednesday, it surged to the highest level since 2011 amid several other strong economic reports, and investors will once again be keeping a keen eye on the monthly average earnings data this Friday.
With the Federal Reserve’s September interest-rate hike now in the history books, fixed-income traders are pricing in a December increase as all but certain. They’ve also bolstered bets on how many moves are likely in 2019, although the 54.5 basis points of tightening currently priced by the eurodollar futures market is still less than the three quarter-point hikes envisaged by policy makers’ own median projection.