More Americans are getting a second job to offset sting of high inflation
Chronic inflation forcing more Americans to get a side gig
Expert predicts inflation will cool 'cyclically' in 2024
KKR's Henry McVey joins 'Barron's Roundtable' to discuss GDP data showing the economy is growing and inflation cooling.
The constant presence of high inflation is pushing more Americans to take on a side hustle as the cost of everyday necessities continues to rise.
The Labor Department reported on Friday that nearly 8.13 million people held multiple jobs in January – up from 7.87 million one year ago. In total, they represent about 5.1% of the total U.S. workforce, an increase from 5% just one year ago.
The growing likelihood of Americans holding more than one job comes as they continue to confront stubbornly high inflation that has rapidly eroded their purchasing power.
In fact, the government reported last month that the average hourly earnings for all employees was $11.10 in December, which represents a 2.89% decline from the $11.43 figure in January 2021, shortly before the inflation crisis began.
THE NUMBER OF HIGH-PAYING JOBS IS DWINDLING
A window display at The Vacation Supply Company on Collins Ave. in Miami Beach, Florida. (Photo by: Jeffrey Greenberg/Universal Images Group via Getty Images / Getty Images)
By that measure, the typical U.S. worker is worse off today than two years ago, even though nominal wages are rising at the fastest pace in years.
Inflation has created severe financial pressures for most U.S. households, which are forced to pay more for everyday necessities like food and rent. The burden is disproportionately borne by low-income Americans, whose already-stretched paychecks are heavily impacted by price fluctuations.
AMERICANS IN THESE STATES ARE GETTING A PAY RAISE THIS YEAR
While inflation has fallen considerably from a peak of 9.1% notched during June 2022, it remains well above the Federal Reserve's 2% goal. Additionally, when compared with January 2021, prices are up a stunning 17.6%.
The cost of necessities like food, gasoline, rent and child care remain far more expensive than they were just one year ago. Chronically high prices are forcing Americans to spend about $650 more per month than they did two years ago, according to a recent estimate from Moody's Analytics.
Gas prices are listed at a station in Los Angeles, California, on July 19, 2022. (FREDERIC J. BROWN/AFP via Getty Images / Getty Images)
Food prices are up 33.7% from the start of 2021, while shelter costs are up 18.7%, according to FOX Business calculations. Energy prices, meanwhile, are up 32.8%.
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"People are experiencing high prices. If you think about the basic necessities like bread and milk and eggs and meats of various kinds, prices are substantially higher than they were before the pandemic," Federal Reserve Chair Jerome Powell said Sunday during an interview with "60 Minutes."
As they spend more on everyday goods, Americans are burning through their savings, and are increasingly turning to credit cards to cover those basic expenses.