I’ve spent eight months looking for a job, and have spent hours looking over job boards, talking to friends and networking. Everyone I know would describe both the economy and the job market as poor; however, recent information suggests that it’s not as bad as you, I, and everyone else thinks.
Economists Expect the Job Market to be Back to Normal by 2015
Two economists at the Federal Reserve Bank in Kansas looked at 23 measures of the economy to come up with the strength of the economy, and the speed of improvement. Looking at those factors, the economists estimate that, if current growth is maintained, the United States job market will be back to “normal” by the summer or fall of 2015. While the strength of the economy is still lower than it’s been for a long time, the rate of improvement is significantly better than historical rates. If that growth keeps up, then we’ll have as good a job market as the 20-year average. Given the booms we’ve experienced, in that period of time, it should be pretty good.
The Affordable Care Act isn’t Expected to Effect the Job Market
According to the ADP National Employment report, in June, businesses added 188,000 jobs, which is a full 38,000 more than the 150,000 expected. This number is also the fastest pace since February, and a good sign of a growing job market. Particularly impressive is that this is that businesses of all sizes are gearing up for the Affordable Care Act (or Obamacare), which some analysts expected to have some serious negative effects on the job market. Despite this, even sectors that experienced huge losses during the recession, like construction and manufacturing, had gains.
Underemployment for Recent College Grads is at 44%
This might sound like a bad thing, but really, it isn’t all that bad. According to researchers at the Federal Reserve Bank of New York, as much as 44 percent of recent college graduates, aged 22-27, are employed as baristas, wait staff, taxi drivers, and other low paid positions that make no use of their degree. However, other than the tech boom of the late 1990s and the early 2000s, the underemployment rates for this demographic has stayed around 45 percent. Most grads in the 1980s and 90s made it into jobs appropriate for their education and skills, which is most likely what will happen for recent graduates now, especially with the continuing importance of technology skills that younger people excel at.
The Employment Rate is Still Through the Floor
And now the bad news. According to the United States Bureau of Labor Statistics, the employment rate – that is, the percentage of the adult population that is currently employed – is at a 30-year low of 58.6 percent. You’d have to go all the way back to 1983 to find employment rates that low. The population has been growing at a rate of 200,000 a month, while an average of only 173,000 jobs have been added. What does this mean? Companies have been creating jobs, but only at a level that keeps up with the current growth of population – not enough to make up for all the jobs lost in 2008’s Great Recession.
But what about the unemployment rate? While the that rate has been ticking down recently, the number excludes those who have retired early, gone back to school, or those who have given up looking for jobs. The employment rate takes into account those people, so it shows the impact of all those who have opted out of the work force, a number which has been growing steadily.