This month's employment report points to a trend of job growth crawling just barely above our low expectations for recovery, which is good news for Millennials returning to the labor pool after years of flagging participation. And-surely this counts for something-we were spared a repeat of September's politicized BLS paranoia.
According to the October numbers, the employment gains average 170,000 jobs per month since August, a better showing than previously thought and supporting last month's revisions for the summer.
Although a swift labor revival remains elusive, at this point in the recovery, the prospect of restoring pre-recession employment rates sometime around the beginning of the next decade seems like a boon. Millennials, who are now flowing back into the labor market after yet another listless summer, appear to be looking on the bright side.
In October unemployment rates increased for 20 to 24-year-olds (from 12.4 percent in September to 13.2 percent) and 25 to 34-year-olds (a less dramatic jump from 8.1 percent to 8.3 percent) as workers returned to the market and rejoined the ranks of the unemployed. The official statistics only include those people who either spent time at work or actively looked for employment, so as more workers gained confidence in the economy and returned to the job search last month unemployment rates increased.
Both age cohorts saw gains in labor force participation; for 20 to 24-year-olds it reached 71.2 percent, the highest point since February. The 25 to 34-year-old cohort, which has not had a participation rate of 82 percent since 2010, saw a rise in the employment level in October three times greater than younger workers. This kept the unemployment rate from spiking as sharply.
Although young people are coming back to the job market-or more of them are entering for the first time instead of taking on more schooling, opting for a "gap year," working in the informal sector, etc.-there is a sizable difference between the size of the young adult labor force today, and where it would be if young adults were participating at rates equal to those before the financial crisis.
In 2007, the average labor force participation rate for 20 to 24-year-olds was 74.5 percent and for 25 to 34-year-olds it was 83.3 percent. If those rates still characterized the young adult population we would have more than a million additional workers in the market. That is a huge loss of potential output from the squandered resources of our nation's bright and capable workforce. Getting young adults back into the labor market, and absorbing them in productive activity, is essential for a real recovery.
RETAIL
October's biggest hiring gains went to retail, with 36,400 jobs added over the month. Many of the younger workers submitting résumés and attending interviews over the coming months and years will end up here.
The retail sector is one of the largest employers of young adults and is projected to have the greatest job growth over the decade to 2020, making the condition of employment in the industry a crucial issue for young workers today and in the future.
Unfortunately, most big retail firms can be characterized as low-wage employers, with the typical salesperson bringing home annual wages of $20,880 and the typical cashier even less, at $18,840. After coming of age during years of economic malaise any job seems like a good job, but being trapped in low-wage employment is not likely to sustain that optimism. In the months ahead young adults will temper their expectations based on the quality of work in the industries that are hiring. That relationship makes the outlook for retail even more important for this generation.
The October jobs report marks the return of some enthusiasm for the labor market heading into the holidays. The decline in both discouraged workers and part-time workers who really want full-time jobs shows an economy slowly moving toward better hiring conditions.
SANDY
That the report also reveals wages barely keeping pace with inflation, and that the most new opportunities arose in a low-pay industry, is unlikely to sustain our momentary joy. Moreover, the October numbers do not reflect the impact of Hurricane Sandy on businesses and employment. The storm caused extraordinary damage and economic shock all along the eastern seaboard. The release of October's positive labor report during the same week Sandy struck offered cause for relief among those who follow the labor market or are struggling to thrive within it. But at that point many were braced for the worst.
