Good News For Grads in the Jobs Report
While the September jobs report from the Bureau of Labor Statistics provided plenty of political ammunition, it remains an ambiguous signal about the current labor market.
Young people, who are at a disadvantage when hiring is slack, tend to fare worse in such good news/bad news situations. They confront the same challenges as the working population overall, but are not as well-positioned to endure them. In this case those obstacles include weak growth, persistent rates of long-term unemployment, and a substantial rise in workers holding part-time positions because they cannot find the full-time work they need.
Young adults have less job experience and lower savings than older workers, making them more likely to accept employment that provides the bare minimum they need to get by—not the best situation for someone looking to launch a career or start a family. But in addition to sharing the challenges, this month workers ages 20 to 34 experienced the same positive outcomes as did the population as a whole—more young adults are participating in the labor market and more of them have jobs.
But for once, good news in the jobs report found its way to the young adult labor force.
The proportion of people who couldn’t find work declined across just about every age group in September. In fact, breaking down the unemployment rate by age and sex, women of all ages and men under age 55 had an easier time finding a job last month than in the months before. The falling unemployment rates accompany upward revisions of the past two months’ disappointing job numbers, bringing the estimates for new employment in the economy to nearly 146,000 per month for the third quarter of 2012. Counting those newly employed workers was enough to push the unemployment rate for the entire labor force down to 7.8—a minor milestone for a labor force in which at least 8 percent of workers were unemployed every month since January 2009.
Workers ages 20 to 24, like the labor force overall, are experiencing their lowest unemployment rate since January 2009. But for these young adults that landmark statistical threshold still means that 12.4 percent, or nearly 1 in 8 young people in the labor force, cannot find work. The cohort of workers ages 25 to 34 regained the ground lost since April, but hiring among this group continues to lag stubbornly behind the national average, reflected in a September unemployment rate of 8.1 percent.
While previous drops in unemployment coincided with workers leaving the labor force, this month is different. In September young people rejoined the labor market. At the same time the proportion of the young adult population who actually held a job increased. Although still far below pre-recession levels, the employment-population ratio for younger workers grew to subsume the losses felt over the languid summer months. Now 61.6 percent of all 20 to 24-year-olds, and 74.9 percent of 25 to 34-year-olds, are employed.
After accounting for revisions of the job creation numbers for July and August, September actually saw the lowest job growth in the quarter. But although the number of jobs added is consistently amended with new data, unemployment rates are not. That means that the good news for this month is probably deferred from months prior, and the status of the labor market does not point to a trend of faster growth.
The addition of just 114,000 jobs in September tempers the good news. Young adults reentering the labor market or looking for better opportunities can expect to be welcomed back with about the same enthusiasm as they’ve enjoyed so far in 2012. At least, that is, until the numbers are revised again in November.
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