On Good Friday, the monthly jobs report delivered an Easter basket full of rotten eggs. The report indicates that the job market is not healthy. It’s not easy being unemployed and with a fresh, new wave of college graduates about to enter the job force, the supply of jobs is about to get tighter.
In March, the U.S. economy added just 126,000 jobs compared to the 245,000 that were expected –causing the unemployment rate to hold steady at 5.5 percent. That’s nearly half as many jobs as economists expected with no good explanation for why such as bad weather or seasonal employment layoffs. This marks the first time in 14 months that the job creation dropped below 200,000 in the past 14 months.
That isn’t all the bad news. Both January’s and February’s job numbers were revised downwards – meaning the actual number of jobs added were lower than estimated – from 230,000 to 201,000 and from 295,000 to 264,000, respectively. We’ll have to wait and see if March will be revised up or down. Either way, this is nothing to celebrate; the market responded with concern.
There were some improvements but most were so marginal as to have almost no real effect on the lives of individuals and families. Workers received a few more pennies in their paycheck. The average hourly earnings rose 7 cents an hour to $24.86. Full-time positions had a slight boost of 190,000. In addition, the time workers spent being unemployed declined to 30.7 weeks – the lowest level since early on in the recent recession (February 2010)—but still more than seven months.
The service sector continues to lead the way in job creation with 40,000 new positions. We need industries to create jobs, but we have to ask if the service industry represents the best long-term, high-paying positions that our economy needs.
This jobs report is especially disheartening as we enter into the commencement season when college seniors are turning their attention to their job searches, while they wrap up their final classes, write theses, and prepare for graduation.
The unemployment outlook for young people remains tough. According to Generation Opportunity’s March jobs report, the unemployment rate remains at a stubbornly high 13.9 percent for 18-29 year olds. This includes those young people who are unemployed and those who dropped out of the job market because they just could not find work – some 1.8 million young people. One out of four young blacks can’t find work and 14 percent of Hispanic young people are also unemployed. (In full disclosure, I work for Generation Opportunity)
What happens when you add millions of college graduates to the mix? A challenge for currently unemployed young people and a mountain for those who have been struggling to find work and will face new competition for fewer opportunities. Not only are college grads competing with other younger workers who have yet to find work, they are also competing with older Americans who have stepped down in their careers and taken pay cuts to find work in this economy.
For those rising college grads who haven't found a position yet, the jobs outlook has some promise. HR experts are predicting that full-time opportunities are up more than 20 percent compared with last year and that starting salaries will rise by an average of 3.6 percent. Timing will be the key as many employers have hired 2015 graduates in the fall of 2014. For those with no offers, they enter the swamp of unemployed workers. Let’s hope they can find their way out to full employment.
Where is President Obama now to gloat about his “middle class economics”? So far, all we’ve seen are good jobs left behind under his tenure. While the economy may have added millions of jobs, it shed more than that. Furthermore, the positions that have been added still lean toward part-time and un-skilled or low-skills. That’s not a job market set to welcome new grads.