Economy Watch: How Strong is Employment Among Millennials?
- May 11, 2015
The April Bureau of Labor Statistics employment report was generally good news, with a net gain of 223,000 jobs and an unemployment rate of 5.4 percent, the lowest that metric has been in the last seven years, since the onset months of the recession (but before the panic that made it a Great Recession). The BLS also breaks employment down by age group, and there also seems to be good news in those stats for the prospect of sustained household formation in younger age groups. Not that the employment prospects are amazingly bright for younger Americans, especially when compared to older adults, but simply that they’re also better than they have been at any time since before the recession, like the overall employment numbers.
A recent analysis of employment data by the Pew Research Center shows that just over half of the country’s unemployed—50.9 percent of the total—and people between 16 and 34, a group that makes up only about a third of the civilian labor force. Since that’s based on official unemployment numbers, that adjusts for the fact that people in that age group are more likely not to be looking for work because of school. Only those who are looking for work are counted as unemployed, so it’s clear that the younger cohorts of the population still have a harder time finding a job than their elders. For instance, the unemployment rate for 16- to 19-year-olds in April was 15.6 percent, while for 35- to 69-year-olds, it was only 3.9 percent.
Even so, as the employment picture for all workers has improved since 2010 (when the headline number for all age groups peaked at a shade more than 10 percent), the prospects of younger workers (16-34) have likewise improved. Their current unemployment rate, while high, nevertheless represents a 42 percent decrease from January 2010 (by comparison, older workers’ unemployment rate dropped 55 percent decline from January 2010). That’s good news for the continued health of apartment development and leasing. Though there isn’t an exact correspondence between the number of young people getting jobs and the number of young people leaving home or separating from roommates to live in their own apartments, a larger number of employed people 16 to 34 still bodes well for rental housing. Combined with the sheer large numbers of people that age, apartment prospects looks bright indeed.
Unless rising rents really do inspire Millennials to go ahead and buy houses. According to Zillow, 5.2 million renters say they expect to buy a house this year, up from 4.2 million a year earlier. Only a fraction of these would-be buyers are younger, but still a surge in interest in homeownership includes some of them. Zillow also said that the number of renters between 18 and 34 who say they want to buy grew compared with last year, especially in certain markets, such as Chicago, Dallas, Minneapolis, Phoenix, San Francisco and Washington, D.C., with solid job creation. The headwinds of tight credit and high down payments might help keep Millennials in apartments a little longer, but not necessarily forever.