Despite solid job growth in the last three months, for students looking for summer employment, the economy isn’t improving fast enough.
The Bureau of Labor Statistics jobs report released Friday says 120,000 jobs were created in March, a disappointing number compared to the 200,000 jobs added to the economy each month since December.
Looking to temper the freak-out, the Economix blog over at the New York Times says there are a few reasons the March report isn’t the end of the world.
…this is just one month’s report. Given the unusually warm winter, perhaps the seasonal adjustments that the Labor Department uses are a little off.
Plus, bear in mind that the margin of error on all these numbers is huge. The headline number for payroll jobs is always plus or minus 100,000 jobs, meaning that March’s gain of 120,000 is not really statistically significant from 220,000 (or 20,000).
Although the economy is generally on the uptick, recent job creation seems to be driven by low-wage labor. Friday’s Bloomberg briefing, via the Big Picture blog, explains that while better hiring conditions and decreased unemployment means the economy is improving,
…the quality of jobs driving this improvement is weak and confined to low-paying areas of the economy.
While roughly 41 percent of the jobs created since 2010 are in the aforementioned low-wage sectors, they only account for 29 percent of the total labor force. Factoring in public sector job losses, these four low-wage-paying subsectors account for a whopping 70 percent of all gains during the past six months.
Bloomberg also points out that workers with two or more years of college are “most likely to be caught in the squeeze between demand for advanced skilled labor and the outsourcing of many professional office and back office jobs.” The unemployment rate for this group, “while declining to 7.3 percent in February from 8.9 percent in September 2010, is still well above the 3.3 percent pre-recession low observed in November 2007.”
According to BLS data, which measures teen summer employment in July when it’s at its peak, July youth unemployment (youth ages 16 to 24) has been the highest since the record began in 1948. The July 2010 rate was a record high of 19.1 percent, up from 18.5 percent the previous year. It came down to 18.1 percent in July 2011.
So although the summer jobs outlook is getting better, it’s slow to improve.
“Our national youth unemployment rate currently stands at 16 percent for youth ages 16 to 24. That number is better than at any point since the recession began, but it’s still too high,” said Secretary of Labor Hilda Solis, speaking at the launch of the Obama Administration’s “Summer Jobs+” initiative in early January, which aims to generate 250,000 summer jobs and long-term employment positions for low-income youth by the summer. In the summer of 2007, before the crisis, the unemployment rate was 10.8 percent.
Whether this initiative succeeds in creating jobs, we probably won’t know until the BLS’s next report comes out in August.
ABOVE: The “Summer Jobs+” website, at dol.gov/summerjobs.