Millennials are giving a late-cycle boost to the U.S. labor market. The economy added 211,000 positions in April, reducing the jobless rate to its lowest level in 10 years. Moreover, unemployment among young people is finally echoing the national picture as they are joining the workforce in bigger numbers. It's a sign that the nearly eight-year-old recovery is broadening.
Job growth among 20-somethings has traditionally helped economic rebounds, but they've been largely missing in the current expansion. They typically have a high labor-participation rate, but it fell by 3 percentage points to around 81 percent in 2013, according to the Bureau of Labor Statistics. Record student-debt levels put many in an economic bind. For the first time in history, the percentage of 18- to 34-year-olds living in their parents' home edged out other living arrangements in 2014, according to the Pew Research Center.
The unemployment rate among 25- to 34-year-olds, which had lagged the improvement in the overall rate, fell to 4.4 percent in April, the same level as the U.S economy's as a whole. The cohort's jobless rate peaked at 10.7 percent in October 2009, seven-tenths of a point higher than the overall peak. The labor-participation rate for that age group is now approaching 83 percent, which is in line with 2007 levels.
The job market's high tide is lifting other boats as well. A measure of unemployment that includes people working part time involuntarily fell to 8.6 percent in April, the lowest level since November 2007. The jobless rates among African-Americans and Hispanics have also lagged behind the national pace, but they have fallen by more than half since December 2009 – to 7.9 percent and 5.2 percent, respectively. High-school graduates without a college degree are also closer to the national rate, standing at 4.6 percent in April.
Lagging productivity, which fell in the first quarter to an annualized rate of 0.6 percent, is one worrisome aspect that the U.S. economy can't seem to shake so far. But the broader jobs growth shows more segments of society are finally benefiting from the recovery.
Commentary by Gina Chon, Washington correspondent for Breakingviews. Follow her on Twitter at @GinaChon.
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