Friday, March 6, 2015

Trends in Employment: What Age Groups Get the Jobs?

One interesting fact in today's jobs report (see Diving Into the Payroll Report: Establishment +295K Jobs; Household +96K Employment, Labor Force -178K) was a drop in teenage unemployment of 1.7 percentage points while overall the unemployment rate fell by only 0.2 percentage points.

The only reason the overall rate fell was a plunge in labor force of 178,000. Household survey employment only rose by 96,000 vs. the establishment survey gain of an alleged +295,000.

The decline in teenage unemployment got me wondering: Where are the jobs, and what age groups got them? Here are a few seasonally adjusted charts from the St. Louis Fed.

Employment 16-19 Month Over Month



Employment 20-24 Month Over Month



Employment 25-54 Month Over Month



Employment 55+ Month Over Month



Age Categories

25-54 is a rather broad category. So is 55+. I would have liked to see finer breakdowns.

Additional data is available on the BLS data site directly, but even there, not all of the seasonally adjusted numbers I wanted were available. However, all of the age groups I wanted to see on a "not seasonally adjusted" basis were available.

Let's take a look at the two sets of tables I created from BLS data.

Not Seasonally Adjusted Employment Growth Year-Over-Year

Age GroupEmployment Growth Y/Y NSAPopulation Growth Y/YEmployment Relative to Population Growth
16-19456,000-34,000490,000
20-24409,000-26,000435,000
25-34866,000617,000249,000
35-4469,000108,000-39,000
45-54464,000-207,000671,000
55-59175,000279,000-104,000
60-64296,000543,000-247,000
65+228,0001,534,000-1,306,000

Note the huge outsized job gains in age groups 16-19 and 20-24. On an age-adjusted basis, the job gains are even greater.

Also the demographic shift to age group 25-34 puts the 866,000 job gain in that group in proper perspective. Relative to population growth, age group 35-44 actually lost jobs.

Retirement explains age groups 60-64 and 65+. Retirement (and forced retirement), along with rising disability fraud, also explains the drop in participation rate.

By forced retirement I mean people who want a job but do not have one, so they retire to collect Social Security because they need the income.

Seasonally Adjusted Employment Growth Month-Over-Month

Age GroupEmployment Growth M/M SAPopulation Growth M/M
16-1986,000-6,000
20-24103,000-20,000
25-34108,00037,000
35-44-86,0002,000
45-5478,000-55,000
55+-187,000-6,000


Perspective on the 96K Household Survey Gain

Of the 96,000 gain in employment this month, 189,000 of it came in the age group 16-24 even though that population group dropped by 26,000!

Please stop and think about that for a second.

Yes, retirement affected the overall results, but even so, age group 35-44 lost 86,000 jobs. Overall it seems reasonably safe to assume more high-paying jobs were lost this month than gained.

Still think this was a good jobs report?

Close scrutiny of both month-over-month and year-over-year data suggests we keep adding low wage jobs while boomers retire en masse.

These job reports are nowhere near as strong as most think.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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