Employment: What Age Group Gets the Jobs?

Inquiring minds are investigating job creation. Here is the question at hand: What age group or age groups get the bulk of the jobs?

ZeroHedge claims No Country For Young Workers: Only Americans 55 And Older Found Jobs In March.

We first showed back in October 2012 that in America, courtesy of the Fed's micro-mismanagement of everything, the labor force has been turned upside down, and the only jobs being created are those for aged workers, Americans 55 and over. The reason is two-fold: with savings rates at zero, Americans who were on the verge of retiring found that the fruit of their labor was worth nothing under ZIRP (and may well be punished under the upcoming NIRP) as their savings (and fixed income investments) generate zero interest income, while young Americans would rather stay in college by the millions funded generously by trillions in Uncle Sam student loans.

All of this was on full display in today's jobs number, which while disappointing wildly based on Establishment survey data, was even worse based on the Household survey where only 34,000 people found jobs in March. But it was the age breakdown that was the stunner, and it can be seen best in the chart below.

In short: America continues to be a country where there are only jobs for old men, those 55 and older, who saw a 329,000 increase in jobs in the past month. Every other age group saw job losses!

March Job Losses by Age Group



That was one of the charts ZeroHedge posted. Technically there is nothing wrong with the chart, assuming the numbers are accurate.

However, the chart does not show where gains and losses are in a realistic manner.

A couple charts of my own will explain why.

55 and Over Employment



Note the volatility in this series. Last month employment in the 55 and over category declined by 187,000. This month it rose by 329,000.

Is Age Group 55 and Older Gaining or Losing Employment?

Quick question: Judging from the above chart, is age group 55 losing or gaining employment?

The correct answer is "relative to population growth, it's impossible to tell!"

The only realistic way to prove or disprove ZeroHedge's claim is to factor in age demographics. The proper way to do this is compare the growth in population of an age group vs. growth of employment in the same age group.

Let's chart this for two age groups.

1. Civilian Population 55 and Over
 
2. Civilian Population 25-54

To chart relative employment gains or losses I take the population change from year ago and subtract employment levels from a year ago.

• In periods where growth in population exceeds growth in employment the charts are in positive territory.
 
• In periods where growth in employment exceeds growth in population the charts are in negative territory.

55 and Over Population Minus Employment Year-Over-Year



For age group 55 and over, the growth in population far exceeds growth in employment for every year-over-year comparison. This demographic is "not" adding employment.

25-54 Population Minus Employment Year-Over-Year



For age group 25-54, year-over-year gains in employment were greater than population gains every month since November 2011 except for September and October of 2013.

This is by no means a strong recovery. It simply means the ZeroHedge statement "We first showed back in October 2012 that in America, courtesy of the Fed's micro-mismanagement of everything, the labor force has been turned upside down, and the only jobs being created are those for aged workers, Americans 55 and over." is incorrect. 

Let's do the exercise again month-over-month. For this exercise we need to use seasonally adjusted numbers for employment.

There are no seasonal adjustments for population numbers, you are either alive and counted or dead and not counted, except perhaps for voting purposes in certain places.

55 and Over Population Minus Employment Month-Over-Month



March is one of about 20 months in this series where employment in age group 55 rose relative to population. It is opposite to the long-term trend, yet common enough to be meaningless. One month proves nothing.

25-54 Population Minus Employment Month-Over-Month



Note the purple squares for each year. In years where employment rises faster than population, the bulk of the area will be below the zero line (i.e. negative numbers).

Let's do a sum of the months.

Age Group 25-54 Population Minus Employment 2008-2014

Year	Population Growth - Employment Growth	Monthly Average
2008	2,708,000	225,667
2009	3,476,000	289,667
2010	-404,000	-33,667
2011	-672,000	-56,000
2012	-731,000	-60,917
2013	-187,000	-15,583
2014	-1,107,000	-92,250

Age Group 25-54 Net Gains and Losses

In 2008 the average net monthly loss in employment was 225,667.
In 2009 the average net monthly loss in employment was 289,000.
In 2013 the average net monthly gain in employment was a mere 15,583.

The only strong year in the set is 2014 where net employment gains relative to population growth averaged 92,250 per month. Once again, negative numbers show employment growth relative to population growth.

In 2013, relative to population growth, there was only a tiny gain in employment. The unemployment rate fell dramatically thanks to people dropping out of the labor force.

That should put in context the much hyped monthly job gains over the last year. 

Age Group 55+ Population Minus Employment 2008-2014

Year	Population - Employment	Average
2008	984,000	82,000
2009	2,117,000	176,417
2010	877,000	73,083
2011	1,049,000	87,417
2012	1,847,000	153,917
2013	1,735,000	144,583
2014	1,054,000	87,833

Relative to growth in population there has not been a single year that shows age group 55+ has gained employment. Indeed, the best year in the lot was 2010 where population-adjusted employment fell an average of 73,083 per month.

The following tables show the huge gains every year in retirement age groups 60-64 and 65+.

Age group 60-64 consists of people who may want to retire. Age group 65 and older consists of people who probably want to retire.

Population Growth 60-64 (numbers in thousands)

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2005	12719	12760	12890	12947	12988	13036	13036	12990	12986	12997	13076	13073
2006	13135	13128	13255	13299	13358	13327	13373	13409	13450	13629	13713	13736
2007	13841	13875	14138	14175	14262	14352	14260	14424	14521	14623	14756	14842
2008	14866	14806	14833	14844	14782	14943	14983	15126	15267	15299	15373	15437
2009	15423	15516	15609	15605	15607	15714	15760	15846	15958	16007	16143	16279
2010	16297	16337	16398	16328	16443	16455	16495	16599	16737	16809	16986	17139
2011	17134	17144	17124	17162	17161	17294	17368	17354	17465	17506	17582	17513
2012	17815	17745	17650	17705	17631	17632	17639	17774	17779	17841	17919	17790
2013	17847	17854	17830	17904	17967	18056	18118	18271	18151	18126	18241	18170
2014	18293	18376	18394	18441	18475	18449	18522	18472	18593	18664	18729	18873
2015	18848	18919	18973

Population Growth 65+ (numbers in thousands)

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2005	34888	34933	34955	34982	35014	35033	35084	35149	35168	35206	35201	35208
2006	35362	35395	35461	35509	35554	35607	35625	35671	35733	35797	35804	35841
2007	35946	35956	36013	36048	36133	36207	36234	36290	36351	36444	36511	36603
2008	36810	36866	36925	37002	37054	37110	37165	37247	37318	37437	37481	37522
2009	37677	37709	37782	37861	37905	37967	37979	38059	38143	38232	38297	38362
2010	38401	38444	38499	38573	38588	38668	38708	38791	38877	38906	38973	39045
2011	39383	39402	39450	39478	39488	39575	39635	39778	39937	40045	40208	40364
2012	41085	41231	41379	41481	41601	41751	41876	42082	42278	42413	42557	42695
2013	42724	42851	42986	43071	43192	43307	43453	43607	43710	43887	43998	44155
2014	44265	44402	44561	44638	44787	44875	45002	45116	45249	45398	45534	45685
2015	45780	45936	46091

Retirement Age Perspective

• Since March 2008, the age 60-64 demographic rose by 4,140,000.
• Since March 2008, the age 65+ demographic rose by 9,166,000.
• Since March 2008, the 60+ demographic rose by 13,306,000.

It is reasonable to assume some of those in age group 60-64 retired. It is reasonable to assume most of those older than 65 did retire.

Yet, retirement alone does not account for the huge drop in the unemployment rate. I will prove that in a followup post with a discussion of "core unemployment".

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com