Friday, November 18, 2011

Possible Sign of Life?

There was no obvious indication of an overall impending recovery in last month’s jobs numbers. At 9 percent, October’s unemployment didn’t change much from previous months. 
But one outlier existed amongst this clutter of figures.  Job prospects for workers without a high school diploma apparently increased as their year-to-year unemployment rate dropped by 1.5 percent.  That’s over seven times the drop witnessed by workers with some college experience. 
Of course, at 13.8 percent, the highest jobless rate of all workers, this demographic has the most room for improvement. 
As I outlined in an earlier post these numbers should be viewed with a degree of skepticism.  Month-to-month and even year-to-year estimates are subject to change as more information is examined. 
But let’s assume this decrease is accurate and will continue over the next few months.  What would that tell us about the job market? 
It’s safe to assume that workers without a high school diploma are low-wage earners.  If they are finding a more receptive job market, then perhaps the freeze on investment by businesses is beginning to thaw. 
It isn’t surprising that preceding a recovery, low-income workers would be the first hired, largely because they were the first fired at the beginning of the downturn.  But, also, a company with only tepid confidence would likely want to initially test the waters with the cheapest labor available. 
I will keep an eye on this stat when November’s numbers are released and, perhaps, if unemployment continues to drop amongst this group it will indicate a trend that foments a larger labor market recovery. 

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