The U.S. economy added just 165,000 jobs in April, which caused the unemployment rate to fall to a 4-year low of 7.5 percent. March's numbers were readjusted, with 50,000 more jobs added than previously reported, meaning that 138,000 jobs were added that month. Economists warned, though, that that doesn’t help improve the sluggish track the economy has been on. The first two months of the year saw an average of 200,000 jobs added, although growth cooled in March.
The American economy continues to add jobs in proportion to population growth. Nothing less, nothing more.
The share of American adults with jobs has barely changed since 2010, hovering between 58.2 percent and 58.7 percent. This employment-to-population ratio stood at 58.6 percent in April. That is about four percentage points lower than the employment rate before the recession, a difference of roughly 10 million jobs. In other words, the United States economy is not getting any closer to recreating the jobs lost during the recession.
Housing Starts Surge, Construction Jobs Don't
While the number of housing starts has surged – nearly doubling in the last two years – employment in residential construction has barely budged. And construction employment tracked down ever so slightly to 5.79 million workers in April, according to the preliminary data.
What gives? Where are the missing construction workers?
Those are questions that economists have been puzzling over for the last year or so, as the housing market has started to normalize, with low inventory and new demand causing prices to rise in markets across the country and builders eagerly breaking ground on new developments from Florida to California.
Over time that should lead to rising employment in the sector, especially given pent-up demand for projects. But not yet. Construction employment is starting to turn up, but from a very low level: There are about as many construction workers now as there were in 1997. And construction employment in the residential sector remains essentially flat, gaining about 2.5 percent in the last year.
There seem to be a few components to the answer. The first is that housing starts tend to tell us where the market for construction workers is going, not where it is right now. So even as starts have surged as builders have begun new projects, the overall number of units under construction remains relatively low – meaning relatively few available jobs
Second, it seems that builders in some markets may be having trouble recruiting skilled workers, as [NYT reporter] Catherine Rampell recently reported. That has not yet led to much of a surge in compensation in the sector, as you might expect. But perhaps the businesses are paying workers under the table, or making do with fewer of them, in part by increasing their hours.
Moreover, builders will eventually need to hire employees to work on new projects. (As far as I know, there have not been any great productivity advances in home building in the past few years, and nobody’s outsourcing the work to robots.)
The Young Suffer The Most...
NY TIMES
THE idle young European, stranded without work by the Continent’s dysfunction, is one of the global economy’s stock characters. Yet it might be time to add another, even more common protagonist: the idle young American.
For all of Europe’s troubles — a left-right combination of sclerotic labor markets and austerity — the United States has quietly surpassed much of Europe in the percentage of young adults without jobs. It’s not just Europe, either. Over the last 12 years, the United States has gone from having the highest share of employed 25- to 34-year-olds among large, wealthy economies to having among the lowest.
The grim shift — “a historic turnaround,” says Robert A. Moffitt, a Johns Hopkins University economist — stems from two underappreciated aspects of our long economic slump. First, it has exacted the harshest toll on the young — even harsher than on people in their 50s and 60s, who have also suffered. And while the American economy has come back more robustly than some of its global rivals in terms of overall production, the recovery has been strangely light on new jobs, even after Friday’s better-than-expected unemployment report. American companies are doing more with less.
Employers are particularly reluctant to add new workers — and have been for much of the last 12 years. Layoffs have been subdued, with the exception of the worst months of the financial crisis, but so has the creation of jobs, and no one depends on new jobs as much as younger workers do. For them, the Great Recession grinds on.
For many people with jobs and nest eggs, the economy is finally moving in the right direction, albeit a long way from booming. Average wages are no longer trailing inflation. Stocks have soared since their 2009 nadir, and home prices are increasing again. But little of that helps younger adults trying to get a foothold in the economy. Many of them are on the outside of the recovery looking in.
....Except for College Grads
The official unemployment rate for 25- to 34-year-old college graduates remains just 3.3 percent.
Among all segments of workers sorted by educational attainment, college graduates are the only group that has more people employed today than when the recession started.
The number of college-educated workers with jobs has risen by 9.1 percent since the beginning of the recession. Those with a high school diploma and no further education are practically a mirror image, with employment down 9 percent on net. For workers without even a high school diploma, employment levels have fallen 14.1 percent.
But just because college graduates have jobs does not mean they all have “good” jobs.
There is ample evidence that employers are hiring college-educated workers for jobs that do not actually require college-level skills — positions like receptionists, file clerks, waitresses, car rental agents and so on.
Megan Parker, right, a law firm receptionist, and Laura Burnett, a paralegal, are college graduates, as are all their co-workers
In other words, workers with four-year degrees have gobbled up all of the net job gains. In fact, there are more employed college graduates today than employed high school graduates and high school dropouts put together.
It is worth noting, too, that even young college graduates are finding jobs, based on the most recent data on this subgroup. In 2011, the unemployment rate for people in their 20s with at least a bachelor’s degree was 5.7 percent. For those with only a high school diploma or a G.E.D., it was nearly three times as high, at 16.2 percent.
Americans have gotten the message that college pays off in the job market. College degrees are much more common today than they were in the past. In April, about 32 percent of the civilian, noninstitutional population over 25...had a college degree.
Twenty years ago, the share was 22 percent.
These forces might help explain why there is so much growth in employment among college graduates despite the fact that the bulk of the jobs created in the last few years have been low-wage and low-skilled, according to a report last August from the National Employment Law Project, a liberal research and advocacy group. Today nearly one in 13 jobs is in food services, for example, a record share.
Clearly, positions in retail and food services are not the best use of the hard-earned skills of college-educated workers, who have gone to great expense to obtain their sheepskins. Student loan borrowers graduate with an average debt of $27,000, a total that is likely to grow in the future.
The median weekly earnings of college-educated, full-time workers — like those for their counterparts with less education — have dipped in recent years. In 2012, the weekly median was $1,141, compared with $1,163 in 2007, after adjusting for inflation. The premium they earn for having that college degree is still high, though.
In 2012, the typical full-time worker with a bachelor’s degree earned 79 percent more than a similar full-time worker with no more than a high school diploma. For comparison, 20 years earlier the premium was 73 percent, and 30 years earlier it was 48 percent.
So, despite the painful upfront cost, the return on investment on a college degree remains high. An analysis from the Hamilton Project at the Brookings Institution in Washington estimated that the benefits of a four-year college degree were equivalent to an investment that returns 15.2 percent a year, even after factoring in the earnings students forgo while in school.
“This is more than double the average return to stock market investments since 1950,” the report said, “and more than five times the returns to corporate bonds, gold, long-term government bonds, or homeownership.”