Taking another look at the January 2024 jobs report
San José, CA – The January 2024 jobs report was labeled “Blockbuster” by the New York Times, “Hot” by the Wall Street Journal, and “Shockingly Strong” by the Washington Post. Yet the headlines of three of the national newspapers failed to capture the weaker side of the report.
These headlines were based on a survey of employers, both private and government, that showed 353,000 net new jobs created in January, almost twice what economists were expecting. But there is also an unemployment report based on a survey of households. This report was much weaker, showing 31,000 fewer people with jobs. More people were working part time for economic reasons – that is, they were unable to find full-time work.
This divergence between the employers and household survey may help to explain why so many people report feeling that the economy is doing poorly despite a low unemployment rate of only 3.7%.
Even more unusual in what is considered a strong economy is that the total weekly hours worked in the private sector fell 0.3% in January and was only up less than 0.2% as compared to a year earlier. Typically, strong job gains, especially in a low unemployment environment, would go hand in hand with many workers having more hours and overtime. It seems that in January the number of new jobs reported, combined with the average hours falling, meant that many part-time jobs were created. More workers are reporting that they work multiple jobs, as one full-time job is not enough to get by. Others have to work multiple part-time jobs.
Another sign of distress is the sharp rise in credit card debt – up 10% in 2023, with the average (unpaid) balance hitting a record $6360 per consumer. More households are carrying debt from month to month: almost half, or 49%, a big jump from 39% in 2021 . Delinquency rates, the percentage of credit card borrowers who are late on their payment rose by more than 50% in 2023. Those more than 90 days late reached the highest level since 2009 in the wake of the financial crisis and double-digit unemployment. With the sharpest rise among those 30-39 years old, the resumption of student loan payments is a likely suspect contributing to more credit card debt and more late payments.