US job growth remains slow as Boomers leave the workforce

Uncategorized

SHARE THIS STORY

US jobs Jun13.pngLast week’s US jobs report contained some good news, but not very much:

• Employment inched up again to 136m. This is still below the 2007 peak of 139m – and never before has the number of jobs failed to rise over a 6 year period
• Equally, disposable income fell back in Q1 to $32.5k, below the 2008 peak of $33.8k. Income has always risen over a 5 year period since 1951

The reason is shown in the charts above of labor force participation rate, which measures the proportion of over-16s in work:

• The overall level (blue line) was only 63.4%. It rose steadily from 1973, but peaked at 67.3% in 2000 and is now back at 1979 levels
• The reason is that the women’s rate (red) went into long-term decline in 2000, after nearly doubling from 33% in 1948, and is now back at 1990 levels

The women’s rate is particularly important for consumer spending. This is because the rise in dual income households was a critical part of the demand SuperCycle from 1983 onwards, as the BabyBoomers reached the 25-54 peak consumption age range.

Women were then joining the workforce in record numbers, boosting consumer spending power. Their wage levels were also rising steadily relative to men due to the Equal Pay Act of 1963. But 2000 saw the trend come to an end, as this marked the moment when the oldest Boomers, those born in 1946, began to join the New Old 55+ group.

This is when spending becomes replacement based, as the the Boomers already own most of what they need, and the kids are leaving home. Equally they have to save more and spend less, due to their extra decade or more of life expectancy compared to previous generations. And since 2005, women’s earnings have plateaued at 80% of men’s.

Policymakers’ stimulus and liquidity programmes cannot do anything to reverse these critical trends. Even the Federal Reserve might therefore have to accept one day that it cannot magically turn low-spending 55-year-olds into high-spending 25-year-olds.

PREVIOUS POST

Global auto sales up 3%, as China's luxury market stalls

12/06/2013

Auto sales data is now available for the first 4 months of the year, covering th...

Learn more
NEXT POST

10th ICIS Innovation Awards now launched

15/06/2013

Innovation is the life-blood of the chemical industry. It is also a critical suc...

Learn more
More posts
Oil market weakness suggests recession now more likely than Middle East war
11/08/2019

Oil markets remain poised between fear of recession and fear of a US attack on Iran. But gradually i...

Read
Smartphone sales continue their decline, whilst $25 smart feature phones open up new markets
04/08/2019

Global smartphone sales have now been falling for 8 consecutive quarters, since Q3 2017. They are no...

Read
UK, EU27 and EEA businesses need to start planning for a No Deal Brexit on 31 October
28/07/2019

New UK premier, Boris Johnson, said last week that the UK must leave the EU by 31 October, “do or ...

Read
London house prices edge closer to a tumble
21/07/2019

After the excitement of Wimbledon tennis and a cricket World Cup final, Londoners were back to their...

Read
G7 births hit new record low, below Depression level in 1933
14/07/2019

If a country doesn’t have any babies, then in time it won’t have an economy. But that...

Read
From subprime to stimulus…and now social division
06/07/2019

The blog has now been running for 12 years since the first post was written from Thailand at the end...

Read
Resilience amidst headwinds is key for H2
30/06/2019

Resilience is set to become the key issue as we look forward to H2, as I note in a new analysis for ...

Read

Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more

Analytics

Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more