Folks, millennials are growing up.
And as millennials grow up they are beginning to do things their parents did.
For example: have kids.
In 2014, the US birth rate increased for the first time since 2007 and millennials — which recently became the largest generation in the US, overtaking Baby Boomers — are beginning to move into their prime family-building years.
And what often follows from children? Babysitters! Enter the jobs.
On Friday, the June jobs report showed the number of people employed in child day care services increased by 14,500 over the prior month, which New River Investments’ Conor Sen noted was the biggest monthly increase in 14 years.
This was also a 4.5% increase over the prior year, the biggest yearly jump since September 2007.
Overall, the June jobs report was better-than-expected.
Nonfarm payrolls grew by 287,000, the most since October 2015 and 107,000 more than expected. The unemployment rate rose to 4.9%, but this was a result of more people coming into the labour market.
But at this point in the cycle — with the US economy having added about 14 million jobs since the financial crisis and wages growing at their fastest rate since the recession — it isn’t the headline job numbers where you find a more complete picture of what’s going on in the labour market but “under the hood” of the report, so to speak.
Torsten Sløk, an economist at Deutsche Bank, highlighted the following chart on Friday, arguing that that as the number of people dropping out of the labour force moves to post-crisis lows we’re beginning to see the labour market reach “full employment.”
And while “full employment” is typically defined as the point in the labour cycle at which wages and inflation begin to accelerate, things like the increase in day care workers also serve as secondary indications of strength not just in the labour market but the economy at large.
For example, if you have extra money to spend on a night out with your spouse, you’re going to need to hire a babysitter in order to spend it.