March 2012 Jobs Report Highlights Youth Unemployment, But Upward Trends for Millennials

This piece originally appeared on Demos' Policy Shop. Follow them on Facebook.

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The 120,000 jobs added in the month of March present the weakest job growth since October 2011, delighting those who would prefer that Americans remain out of work until the elections in November, and confounding economists who fear that the unseasonably warm winter interfered with data analysis. Though we gained fewer jobs than expected, the news is not all bad –- wages eked upward, and the number of people who wanted full-time work but could only find part-time jobs fell substantially.

But 120,000 jobs are not enough to keep up with monthly population growth, meaning that the small dip in the unemployment rate primarily resulted from workers leaving the labor force. Looking at this trend by age group shows that a greater proportion of younger workers, ages 20 to 24, stopped looking for work and dropped out of the labor market than any other group. In fact, enough 20 to 24-year-old workers left the labor force to cause the unemployment rate for workers in this age group to drop from 13.8 percent in February to 13.2 percent in March, even though fewer young people had jobs last month than in the month before. The trajectory was especially poor for young women, who shouldered the entirety of employment losses among 20 to 24-year-olds and suffered a bigger decline in labor force participation rates than men.


In contrast, 25 to 34-year-olds managed to surmount the negative pressure on labor force participation, barely adding to the pool of workers with 81.9 percent labor force participation rates compared to 81.8 in February. The age group’s ability to buck the trend shows 2012 labor force participation rates consistently higher than the average for 2011, and fuels the positive prospects for this age group for the year ahead. The unemployment rate for workers 25 to 34 declined to 8.6 percent in March even as more workers entered the market. Men and women shared the gains nearly equally -- of the 85,000 additional employed workers in the 25 to 34-year-old category, 40,000 were female.


Recent months have offered 25 to 34-year-olds a chance to build up steam for recovery. They are the only group to have experienced a drop in unemployment in February, and the March numbers indicate that the long progression back to normalcy has not yet led to more discouraged young workers giving up on the market and dropping out of the labor force. So while the March jobs report did not bring the heralded 200,000 new jobs for which we had hoped, it does support a positive trend that puts our young adult work force back in business. Since more young people will enter the job market in the late spring and summer, the ability of the labor market to absorb these workers is a crucial indicator for the months ahead.

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Catherine Ruetschlin

Catherine works as a research analyst in the Economic Opportunity Program at Demos. She provides the team with analysis of labor market, population, and other US survey data, as well as additional research support. Catherine came to Demos in September 2011 from the New School for Social Research, where she worked as a research assistant in the Schwartz Center for Economic Policy Analysis and as an academic advisor to graduate students in the social sciences. She is currently completing a PhD in Economics at The New School, focusing on issues related to privatization in the criminal justice system.

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