The U.S. job market is cooling down. Teen and twentysomething workers are going to be among the first to feel it.
The country’s youngest employees, aged 16 to 24, will be among the earliest and hardest-hit by a weakening labor market, making goals like landing a summer gig or breaking into the working world out of college harder to pull off. Some workers are already feeling the effects.
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“It’s going to be a tougher market,” said Joshua Kahn, the associate director of research and public policy at the National Association of Colleges and Employers. “Students are going to have to be more creative in figuring out how to start their career.”
Friday’s weak jobs report showed that the unemployment rate among workers in their early twenties increased to 7.7 percent in July — that’s up from 6.7 percent this time last year. Unemployment among teenagers also increased, from 11.3 in July 2023 to 12.4 percent last month.
Over the past year, joblessness among workers ages 16-24 has been a significant contributor to the uptick in the overall unemployment rate, quarterly data shows.
“Young people are typically first to be fired, last to be hired,” said Alicia Sasser Modestino, a labor economist who has studied the youth workforce. “They will be a sort of canary in the coal mine.”
Investors, policy makers and economists have scoured the labor market for signs of weakness in recent weeks. Those signs — be they higher layoffs, increased jobless claims or more Americans out of work — would help spur the Federal Reserve to cut interest rates.
But for some young workers, it’s already a lot harder to get hired — especially compared with just a couple of years ago, when job candidates were holding all the cards and taking advantage of a tight labor market to switch jobs and get raises.
That’s been Greg Sulentic’s experience. He owns the Express Employment Professionals staffing office in Lincoln, Neb., which has helped place workers 18 and older in roles at call centers, offices and manufacturing facilities.
Two years ago, “we saw a job market like we’ve never seen before,” he said.
That meant young workers with skimpy résumés could land job offers and hop from company to company in pursuit of better pay, Sulentic said. Even bad behavior like tardiness was more easily overlooked as companies just tried to keep their businesses staffed.
“They could sort of get away with anything,” he said. “Employees were going to the highest bidder.”
There’s been a dramatic shift since, he said. Companies are much more selective, and they’re paying closer attention to a candidate’s résumé. Sulentic’s office has started turning away younger workers who can’t show they’ve worked at least a year for the same company.
His advice to early career applicants? Stay put and show you can commit for a full year to just one employer — even if that’s in retail or a fast-food restaurant.
“Those are harsh lessons,” he said. “There’s still plenty of opportunities out there, but you have to come prepared.”
Will the job market get worse?
During the pandemic, unemployment among the economy’s youngest workers fell to historic lows as teens and twentysomethings helped plug holes at businesses scrounging for workers. But as the labor market has cooled, so has businesses’ need for employees.
The Class of 2024 has felt the effects, Kahn said.
“We’re coming off two really big hiring years,” he said. “It is going to be a tougher job market for them than their peers in 2022 or 2023.”
Employers plan to hire 5.8% fewer new graduates than they did last year, according to an April survey from NACE.
It’s hard to say if next year’s graduating class will face even longer odds. The good news about the current job market is that it doesn’t seem headed for a crash, said Andy Challenger, senior vice president at outplacement firm Challenger, Gray and Christmas. Spiking unemployment or surging layoffs seem unlikely, he said.
That’s the good news, at least. The bad news? We’re not going back to the hiring bonanza of 2021–22, Challenger said — and the job market probably won’t get much better than this for a while.
His advice takes a different approach than Sulenic’s suggestion to stay put.
“If you want to search, if you’re in the market now … time is of the essence. It’s a good time to strike,” he said. “It’s hard to imagine six months from now, you’ll look back and say, ‘It’s good I waited.’ ”
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Source: finance.yahoo.com