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Military veterans fare well in recovering job market

As Defense Dept. draws down, jobless rate falls for returning troops

US Marines military
Wakil Kohsar | AFP | Getty Images

Bringing U.S. troops back home from far-flung conflicts takes them out of harm's way. But it also sends many looking for a new job.

As the drawdown of American forces continues in the Middle East, the Army announced in July it will reduce troop strength by some 57,000 soldiers over the next two years. That news helped push the level of expected layoffs to a four-year high, according to a monthly survey from outplacement consultant Challenger, Gray & Christmas.

"When the military makes cuts, they tend to be deep," CEO John A. Challenger said in a statement. "With wars in Afghanistan and Iraq winding down and pressure to cut government spending, the military has been vulnerable to reductions."

Those cuts represent a substantial hit to the Army, which has already trimmed some 23,000 enlisted personnel in the last 12 months, to 491,000 personnel as of the end of June, according to the latest data from the Defense Department.

Read MoreUS layoffs surge in July on military cuts

But the reductions represent a relatively small 4 percent cut in the overall U.S. armed services payroll of 1.3 million enlisted personnel. Another 750,000 civilians work directly for the DOD, which doesn't break out the number of people who work indirectly for defense contractors.

And for those enlisted servicemen and servicewomen who muster out, job prospects have improved as the overall recovery continues to put more Americans to work.

Finding a private sector job has been toughest for those who served most recently, but they're getting hired at about the same rate as the rest of the civilian workforce, according to Bureau of Labor Statistics data. The jobless rate for veterans who served in the most recent conflicts (defined by the BLS as "Gulf War Era II") jumped to 6.7 percent last month from 5.4 percent in June—more than a full percentage point higher than than the 5.4 percent rate for Americans who never entered military service.

Prior generations of veterans have fared even better in the current job market. For all vets, the jobless rate was 4.7 percent in July; for those who served in Vietnam, Korea or World War II it was 4.4 percent. And vets who served in what the BLS calls "Other Service Periods" (including peacetime), the jobless rate was 4.0 percent. And the jobless rate for those who served in the first Gulf War era alone fell to just 3.6 percent.

Overall, the jobless rate for all men who served (4.7 percent) was lower than for women (5.0 percent), though some of the difference is likely due to lower overall jobless rates for older veterans, who enlisted at a time when women made up a smaller share of the military.

But in terms of raw numbers, older veterans make up a much bigger share of those without a job. Of the 573,000 unemployed veterans in 2014, 59 percent were 45 and over; 37 percent were age 25 to 44; and 4 percent were age 18 to 24. That reflects the much larger numbers who served in past wars.

For many of those who were in combat, disability represents one of the biggest challenges to finding a job. But the jobless rate for veterans with a service-connected disability was 5.9 percent in August 2014, the latest BLS data available—the same rate as for veterans with no disability.

About a third of those disabled veterans worked in the public sector (as of August 2014), compared with roughly 1 in 5 veterans with no disability.