Good News, Graduates (And Parents)— May 2024 Jobs Report Is Strong

The May 2024 jobs report showed remarkable strength just in time for new graduates despairing they had to move home. You got this graduate, you can find a job and live on your own.

The Biden administration’s efforts to address supply chain issues are effectively slowing down price hikes, and employers are happily and confidently hiring workers. The unemployment rate is 4.0% — as good a measure of full employment as you can get.

Other signals point to a strong economy. Job losers are a lower share of the unemployed — 48.7% — than before and new labor market entrants, exactly who you would expect to be unemployed for a while, are a growing share of the unemployed at 9.5%.

So, graduates, you may be looking for a while, but the signals indicate you will get a job quickly, especially if you are pounding the pavement in the growth sectors of health care, government, leisure and hospitality, and science and tech.

Worker confidence is not as high as it has been, but it had been off the charts. The “job leavers” share of total unemployed people shows continued softness, falling to 10.8% this past January, way down from a high of 15.3% in January 2022. Quit rates are settling into a more normal level.

Real Wages Are Rising In A Stronger Economy

For the first time since the COVID-19 pandemic, firms are NOT
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raising prices faster than wages. Buying power is up.

Average weekly earnings for all private sector workers in May were $1,197 per week, up 3.6% from a year ago, while prices increased by only 3.2%. Inflation is on the way down.

Inverted Yield Curve Signals A Stronger Economy

Another sign of the economy’s strength is that the inverted yield curve is righting itself. We used to worry that long-term interest rates being lower than short-term interest rates (the inversion) was a predictor of recession. New thinking says inversions might be worrisome, but if prices are increasing because consumer spending is so healthy, and supplies of goods and services have not kept up, then the economy is strong.

Exactly where you want an economy to be when you are graduating.

Corporate Economists Agree: Biden Is Managing A Strong Economy

Last year 53% of economists working for corporations expected there would be no recession by the end of 2024; now, over 75% of corporate economists are confident that the Biden administration’s economic track record is particularly strong when you consider that many economists – even Democratic Party-aligned ones — were expecting a recession by now.

One can gain a lot of insight from a treasured data series called the New York Fed Survey of Consumer Sentiment (don’t let the name fool you – it’s about workers, too). The expectation of receiving one or more job offers in the next four months has gone up, and so has the expected wage offer.

Advice to Graduates

1. The Perfect Graduation Present? Time with an independent financial counselor. Learn how to manage student debt while you save for emergencies and save for retirement. The savings are complements, not substitutes.

2. Behave Perfectly in Job Interviews. Concentrate on how you can solve the prospective employer’s problems, not how they can solve yours.

I often lean toward pessimism, but there are many positives to appreciate in the current economy. Good luck, graduates!