In the current economic landscape, a concerning pattern is emerging as massive consumer debt is being precariously sustained by the juggling act of holding multiple jobs. This delicate equilibrium relies heavily on a robust labor market, where individuals can readily secure secondary employment to support their financial obligations.
The viability of this approach becomes particularly precarious when considering the potential consequences if unemployment rates begin to rise. Consumers often resort to funding their spending overextension through additional jobs, causing a temporary uptick in indicators. However, this delicate balance is disrupted when one of these supplementary positions is lost and proves irreplaceable, manifesting in an observable decline signaled by rising claims.
Examining the data in isolation may not yield significant insights, but when combined, the figures paint a vivid picture of the challenges consumers face. The synergy of multiple jobholders and continuing claims serves as a nuanced indicator of economic health. It’s a holistic measure, akin to a peanut butter cup, offering a comprehensive view of the intricate dynamics influencing consumer wellbeing.
Recent reports, such as the forecasted increase in bad loans by the largest U.S. banks and the downward trend in temporary help services employment, suggest potential shifts in the job market. The simultaneous retreat from an all-time high in job vacancies, juxtaposed with the rally of the S&P 500, raises questions about the true state of the economy.
Despite the U.S. government’s assertion that the economy is in good shape, a quick fact-check reveals concerning indicators. The number of people working multiple jobs is at or near a record high, signaling potential strain on employment. Additionally, credit card debt has reached a record high, while interest rates have surged to a +20 year high. Housing affordability is at an all-time low, presenting challenges for many households. Moreover, the U.S. government debt has hit a new record high of $34 trillion, equating to approximately $100,000 for every person in the U.S. These stark figures prompt a critical reevaluation of whether the term “fine” accurately reflects the complex economic reality faced by the nation.
Sources:
Multiple Jobholders Per Continuing Claim
Insight: Consumers first fund their spending overextension through more multiple jobs ➡️ the indicator moves higher…
…until one of the jobs is lost and cannot be replaced (signaled in rising claims)➡️ the indicator moves lower. pic.twitter.com/YNnnxpqoOq
— Neely (@NeelyTamminga) December 30, 2023
“Largest US banks set to log sharp rise in bad loans.”
— Win Smart, CFA (@WinfieldSmart) January 9, 2024
Temporary help services employment is rapidly trending down.
Usually a sign of turning job market. pic.twitter.com/nsIhGr7iqI
— Grufity.com (@grufityreports) January 9, 2024
"A retreat from an all-time high in job vacancies has coexisted with a rally for the S&P 500."@johnauthers pic.twitter.com/apMwb1cnBy
— Daily Chartbook (@dailychartbook) January 8, 2024