The cost of everyday goods continues to go up as more Americans are forced to take a side hustle ahead of the holiday season because of the hottest inflation in four decades.
The economy added 263,000 jobs in November, even as employers continued to onboard workers even in the face of steeper interest rates and growing fears of a recession, according to the government on Friday.
The number of Americans with a side gig went up by 165,000 last month, which was an overlooked data point in the report. That is the largest increase since June, and well above the 60,000 monthly average over the past six months, according to Bill Adams, Comerica Bank chief economist.
An increase in part-time work as more people take on side hustles to make ends meet helped boost the headline payrolls number in November, Adams said.
The trend is exemplified by the Federal Reserve'sFederal Reserve's region-by-region roundup of anecdotal information known as the Beige Book, which showed an increase in Americans relying on a second job to make ends meet.
The Atlanta Fed said in its part of the survey that there was an increase in the number of clients relying on side gigs to make ends meet or as pathways to financial self-sufficiency.
The rising likelihood of Americans holding more than one job comes because of the high inflation that has eroded individuals' purchasing power.
The consumer price index, which is a measure of the price of goods, rose by 0.4% in October from the previous month, according to the government last month. On an annual basis prices climbed by 7.7%, near a 40 year high.
In October, the average hourly earnings for all employees decreased by 2.8% from the same month a year ago, when accounting for inflation. The average hourly earnings dropped by 0.1% last month, when factoring in the consumer price spike.
Americans are increasingly relying on savings and credit card debt to pay for necessities. The Commerce Department reported last week that the savings rate fell to 2.3% in October, the lowest in 17 years. In the third quarter, household debt went up at the fastest rate since 2008, with credit card balances jumping by 15%, according to Fed data.
Tuan Nguyen, U.S. economist at RSM, said that savings and inventories won't bolster spending for too long. It is likely that this holiday season will be the last for a while with such a strong spending push.