It’s graduation time. Students are meeting with financial aid counselors and getting debriefed on the amounts they owe in student loans and their schedules for repayment. Don’t worry, the counselors say. You have six months before you start your repayment plan. Hopefully, by then you’ll find a job.
Good luck with that.
This spring’s graduates are charting a course into a labor force still buffeted by the winds of structural unemployment. The unemployment rate of 8.2% for the month of March will likely remain the same or increase a bit for the month of April as these students enter the labor force making them available for work.
The recent gross domestic product (GDP) report should give students some concern about the headwinds they are about to face. The annualized first quarter 2012 growth rate for the economy came in at 2.2%, a bit below the consensus 2.5% expected by a number of the nation’s economists. The Board of Governors for the Federal Reserve has been forecasting moderate growth which factored into their decision to keep the rate charged by banks to lend each other money between 0 and .25%.
Too bad student loans won’t be repaid at that rate.
The jobs numbers may fare a little better than the March report in terms of non-farm payroll jobs created. While the month of March saw 120,000 jobs added to the economy, economist Peter Morici of the University of Maryland forecasts that 175,000 jobs will be reported as created in the month of April. He expects the unemployment rate to remain unchanged at 8.2%.
The .8 percentage point fall in GDP growth between the last quarter of 2011 and the first quarter of 2012 may indicate a decrease in demand for labor because the rate reflects an overall decrease in demand for goods and services.
On the other hand, according to data from the Department of Labor, the number of African Americans and Latinos entering the labor force and finding employment has been increasing. In two states with significant African American populations, job prospects, while not the greatest, may be seeing a little light.
For example, according to the Federal Reserve Bank of Richmond, labor market conditions in Maryland have been improving. Employment increased for the second straight month in April and wages have increased for the fourth consecutive month. Blacks comprise 30% of the population in Maryland.
Approximately 43% of business respondents to the Federal Reserve’s survey expected to expand their workforce in Maryland. These businesses expect to have no problems finding workers with the necessary skills set.
Further to the south, employment totals in the state of Georgia have slowly improved since the 2007 recession, says the Federal Reserve Bank of Atlanta. Payroll employment is now at mid-2009 levels. While all industries in Georgia with the exception of education and healthcare saw job losses during the downturn, most industries are seeing modest improvements. Expansion is being seen in business services, retail trade, education, healthcare, manufacturing, and leisure and hospitality. But, the impact of the Peach State’s recent state-based E-Verify law on it’s agriculture is still unclear as migrant workers left the state in large numbers. Farmers are having a hard time finding skilled domestic work that isn’t unauthorized or undocumented.
Given modest but positive improvements in hiring and growth overall, hope may turn into firmer expectations. We’ll see.