Unemployment Among the Young and the Restless

Excerpt from Raymond James Economist Dr. Scott Brown's latest economic commentary:

The economic data have been mixed in recent weeks. That’s something that typically happens in the early stages of a recovery, but it’s a big problem for the stock market. In equities, it’s all or nothing. Either the economy is booming or it’s falling apart completely. There’s no middle ground – but that’s where we are now. We did learn a few new things last week about the state of the labor market and what the Fed will be considering as its endgame approaches.

The unemployment rate jumped to 10.2% in October (vs. 9.8% in September), a larger increase than expected. However, much of the surge in the unemployment rate was for teenagers (which went from 25.9% to 27.6%) and young adults (which went from 14.9% to 15.6%) – that could reflect problems with the seasonal adjustment – or perhaps state budget strains are limiting the number of seasonal jobs available. Prior to seasonal adjustment, the number of unemployed teenagers and young adults actually fell. As anyone who has gone to college knows, there are many part-time jobs around and students count on those jobs for spending money or to make ends meet. In the current recovery, those jobs have become increasingly scarce. The unemployment rate for those aged 25 years and over edged up to 8.7% (from 8.6% in September and 5.3% a year ago).

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The job market difficulties for teenagers and young adults was apparent before the October numbers. Going forward, we may see policy efforts geared more directly toward job creation, but in the meantime, state and local budget pressures are likely to restrain job growth for the young.

Comments

[bob adamson:]

The job search is tough for all new entrants to the job market as it is for older workers who have recently lost their jobs. College and university students and recent grads that were counting on employment to help support them while attending school or to pay down their accumulated education related debt after graduation will be a particular focal point of discontent if employment recovery lags significantly for a few years. Not only will they not have a job, in many cases, that relates to their career aspirations but they may not have a job at all or have one that provides them (and, in many cases, their young families) reasonable independent support.

While one can say that these college and university students and grads are persons who will likely have the best long term prospects and therefore needn’t come near the top of our list of people for whom to feel sympathy, the fact remains that as a group they are experiencing one of the greatest, least expected and most precipitous drops in prospects and they are a group that will not take this passively if current trends continue.

Nov 10 07:12 PM