American private job growth has hit a three-year low, bad news for college graduates about to enter the workforce with student loans.
“Businesses added 156,000 jobs in April, down from 194,000 in March. Manufacturers shed 11,000 jobs, after losing 3,000 the previous month. Services firms added 166,000, down from 189,000,” according to The New York Times.
The private survey focuses on private businesses and can give a different impression from the job statistics by the Department of Labor which include public job growth as well.
The report comes on the heels of a Bureau of Labor Statistics announcement that productivity fell by 1 percent in the first quarter of 2016 and unit labor costs rose by 4.1 percent. The American economy isn’t shrinking, but employers are feeling a squeeze on hiring.
That means millennials will struggle most of all age groups, especially those without a college degree. The BLS doesn’t track the youth unemployment rate as often as other statistics, but it was 12.2 percent in July 2015, a 2.1 percent decrease from July 2014. The general unemployment rate in July 2015 was 5.3 percent, and it’s declined to 5 percent by March 2016.
The higher rate isn’t an aberration; “young workers always experience disproportionate increases in unemployment during periods of labor market weakness,” Alyssa Davis, Will Kimball, and Elise Gould noted in a 2015 report for the Economic Policy Institute.
So far, the 2016 election hasn’t addressed youth employment and job growth for graduates. The Democrats, when they’ve talked to millennials, have promised free college. The Republicans have deftly avoided the issue.
For those who have jobs, underemployment remains an issue, as does idleness for millennials not in school nor searching for work. The bright side is that underemployment disappears with time. Millennials still develop skills and connections while underemployed, and that leads to better future opportunities. The downside is that their earning power is weakened, sometimes for more than a decade after graduation.
A clear picture of economic growth in 2016 won’t emerge for a few months, as figures could be revised upward or downward. However, “separate figures from the Labor Department Wednesday suggest that job gains could slow later this year,” The Times noted.
A prolonged slump is still growth, but it’s growth that won’t keep pace with new graduates and a growing American population.
