{"id":144180,"date":"2022-08-11T09:44:51","date_gmt":"2022-08-11T15:44:51","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=144180"},"modified":"2023-08-08T14:40:51","modified_gmt":"2023-08-08T20:40:51","slug":"what-july-job-report-says-about-the-economy","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/what-july-job-report-says-about-the-economy","title":{"rendered":"What July&#8217;s Job Report Says About the Economy&#8217;s Health"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm?e=BIGPOC2041763543&#038;light=false\" width=\"100%\"><\/iframe>  \n\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Earlier in August, it was reported that&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.bls.gov\/news.release\/empsit.nr0.htm\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">528,000 jobs were created<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;in July after expectations were around 230,000 jobs. Overall, it was a seemingly better jobs report than expected.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">However, it\u2019s hard to argue that the overall jobs data is still strong (by historical measures, in most categories, it\u2019s still very strong). But, digging into the data, it\u2019s clear that there is a very negative trend. To put it plainly, things are still good, but it\u2019s getting worse quickly.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Details From The Jobs Report<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">While it can be challenging to get the exact change in full-time and part-time job holders since the government uses different data points and surveys to determine these numbers, it appears that the number of full-time jobs declined by about 71,000, and the number of part-time jobs increased by about 384,000. The number of people who took a second part-time job increased by about 92,000.&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">This doesn\u2019t add to the 528,000 total simply because these numbers rely on household surveys instead of employer-reported data. Long story short, many people are picking up part-time jobs to help pay the bills, and a decent number are picking up a second (or third) part-time job. Full-time jobs were reduced in July, which confirms what a lot of people have suspected\u2014there has been a net increase in layoffs.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The Labor Force Participation Rate, the percentage of the population working or looking for work, stands at 62.1%. This is about 1.2% lower than where it was in February 2020 prior to the pandemic.&nbsp;<\/span><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1168\" height=\"450\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/fredgraph-12.png\" alt=\"labor force participation rate\" class=\"wp-image-144182\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/fredgraph-12.png 1168w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/fredgraph-12-300x116.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/fredgraph-12-1024x395.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/fredgraph-12-768x296.png 768w\" sizes=\"auto, (max-width: 1168px) 100vw, 1168px\" \/><figcaption class=\"wp-element-caption\"><em>Labor Force Participation Rate (1948-2022) &#8211; <a href=\"https:\/\/fred.stlouisfed.org\/series\/CIVPART#\" target=\"_blank\" rel=\"noreferrer noopener\">St. Louis Federal Reserve<\/a><\/em><\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">This means we still have several million fewer people working or looking for jobs than we did nearly three years ago. Did they retire? Just taking time off? Are they gig workers? Day traders? Or did they simply give up on trying to find work for the time being? We don\u2019t know, and it\u2019s likely a combination of all these things. This number has been decreasing since March.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Furthermore, just over 300,000 people took part-time work because they needed extra money, either because their hours were cut or because of general economic reasons. These are people who would have preferred full-time work but were unable to find full-time jobs. The increase was about 7% from the preceding month, which is a big jump, but there are only 3.9 million of these workers compared to 4.4 million in February 2020. In other words, we\u2019re seeing more economic instability over time, but we were already heading in that direction pre-Covid.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">About 5.9 million people are currently not in the labor force but would like a job. This portion of people were not counted as unemployed because they were not actively looking for jobs or collecting unemployment. This is compared to 5 million people in February 2020. This figure is a result of people who have given up on finding a job that is acceptable to them, or in some cases, people who have determined that it is more lucrative not to work (for example, someone who makes $15\/hour but has to pay $15\/hour for child care would find that it makes more sense to stay at home than work.)<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The unemployment rate dropped from 3.6% to 3.5% to match the February 2020 number, but if you add in \u201cmarginally attached workers\u201d (which are essentially discouraged workers\u2014those who had looked for a job in the past year but couldn\u2019t find one and stopped looking), the percentage jumps to 10.2% compared to 8.4% back in February 2020. Again, an indication that there are plenty of individuals who want to work but can\u2019t find a job they find suitable, for whatever reason that may be.<\/span><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1168\" height=\"450\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/fredgraph-13.png\" alt=\"unemployment marginally attached workers included\" class=\"wp-image-144183\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/fredgraph-13.png 1168w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/fredgraph-13-300x116.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/fredgraph-13-1024x395.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/fredgraph-13-768x296.png 768w\" sizes=\"auto, (max-width: 1168px) 100vw, 1168px\" \/><figcaption class=\"wp-element-caption\"><em>Total Unemployed, Plus All Marginally Attached Workers (2004-2022) &#8211; <a href=\"https:\/\/fred.stlouisfed.org\/series\/U6UNEM6CA#\" target=\"_blank\" rel=\"noopener\">St. Louis Federal Reserve<\/a><\/em><\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Credit Data<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">In addition to the jobs report, here are a couple of other data points around credit availability and usage that tie into the narrative we\u2019re seeing:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span data-preserver-spaces=\"true\">Available consumer credit increased by more than 10% in June after increasing 6.5% in May. This isn\u2019t the total amount of outstanding debt but the total amount of credit. In other words, people are taking&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/glossary\/heloc\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">HELOCs<\/span><\/a><span data-preserver-spaces=\"true\">, adding credit cards, or increasing credit card limits, even if they\u2019re not yet spending that money. 233 million credit cards were opened in Q2, the most since 2008. People are preparing for additional credit needs.&nbsp;&nbsp;<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">In terms of credit owed, that increased 1.3% in June. So, people are borrowing more, not just opening credit lines.<\/span><\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1168\" height=\"823\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-11-at-11.40.47-AM.png\" alt=\"consumer credit outstanding july 2022\" class=\"wp-image-144189\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-11-at-11.40.47-AM.png 1168w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-11-at-11.40.47-AM-300x211.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-11-at-11.40.47-AM-1024x722.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-11-at-11.40.47-AM-768x541.png 768w\" sizes=\"auto, (max-width: 1168px) 100vw, 1168px\" \/><figcaption class=\"wp-element-caption\"><em>U.S. Consumer Credit Outstanding (2017-2022) &#8211; <a href=\"https:\/\/www.federalreserve.gov\/releases\/g19\/current\/default.htm\" target=\"_blank\" rel=\"noreferrer noopener\">U.S. Federal Reserve<\/a><\/em><\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Final Thoughts<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">My takeaway from this data is the same as what I suspected last week\u2014we are not yet in a recession, but we\u2019re quickly moving in that direction. Both jobs and credit data indicate a tipping point, and things could move downhill quickly and decisively, despite things still looking pretty decent on the surface.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">An economy built on part-time jobs lacks the stability it needs to perform well in the long run. More jobs won\u2019t matter if they don\u2019t offer enough compensation to keep the population afloat.<\/span><\/p>\n\n\n\n<div class=\"wp-block-group border border-gray-200 p-6 rounded-md has-slate-50-background-color has-background\"><div class=\"wp-block-group__inner-container is-layout-flow wp-block-group-is-layout-flow\">\n    \n  <div \n    id=\"segemnt-view-event-block_624f52525847f\" \n    class=\"  \"\n    x-intersect:enter.once=\"\n      analytics.track('On The Market Blog Sponsor View', {\n        referrer: 'https:\/\/www.biggerpockets.com\/blog\/what-july-job-report-says-about-the-economy',\n              })\n    \">\n    \n  <\/div>\n  \n\n\n<h3 class=\"has-text-align-left mt-0 wp-block-heading\"><strong>On The Market is presented by Fundrise<\/strong><\/h3>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-1024x252.png\" alt=\"\" class=\"wp-image-142373\" width=\"256\" height=\"63\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-1024x252.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-300x74.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-768x189.png 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black.png 1380w\" sizes=\"auto, (max-width: 256px) 100vw, 256px\" \/><\/figure>\n\n\n\n<p class=\"mb-0 wp-block-paragraph\" style=\"font-size:16px\"><strong>Fundrise is revolutionizing how you invest in real estate.<\/strong><\/p>\n\n\n\n<p class=\"mt-0 has-slate-600-color has-text-color wp-block-paragraph\" style=\"font-size:16px\">With direct-access to high-quality real estate investments, Fundrise allows you to build, manage, and grow a portfolio at the touch of a button. Combining innovation with expertise, Fundrise maximizes your long-term return potential and has quickly become America\u2019s largest direct-to-investor real estate investing platform.<\/p>\n\n\n\n<div id=button-custom-event-block_624f4a1837234 class='button-custom-event'>\n      <a href=\"https:\/\/t.sidekickopen84.com\/s3t\/c\/5\/f18dQhb0S7kF8cpngfW16gy-_59hl3kW7_k2841CX6NGN35Qwt3rN_mgW56Jw3w1HcgXpf197v5Y04?te=W3R5hFj26QkH2W4hJTY63T3pkxW3Fbt5S3Cdl5cf49M_4s04&#038;si=8000000019411002&#038;pi=6988e0ed-1aea-4af5-9769-8a0de4675eeb\" x-on:click=\"window.analytics.track(&#039;On The Market Blog Sponsor Click&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/what-july-job-report-says-about-the-economy&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\" rel=\"noopener\">Learn more about Fundrise<\/a>\n  <\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Earlier in August, it was reported that&nbsp;528,000 jobs were created&nbsp;in July after expectations were around 230,000 jobs. Overall, it was a seemingly better jobs report than expected. However, it\u2019s hard [&hellip;]<\/p>\n","protected":false},"author":2444,"featured_media":144187,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5528,7119],"tags":[],"class_list":["post-144180","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-news","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/144180","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/2444"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=144180"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/144180\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/144187"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=144180"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=144180"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=144180"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}