The December jobs report was a blowout.
The US economy added 292,000 jobs in the final month of 2015, capping a year that saw the economy add 2.7 million jobs while the unemployment rate fell to 5%.
But for signs that the labour market is significantly tightening look no further than the unemployment rate for Americans with the least amount of formal schooling.
The unemployment rate for those with less than a high school degree fell to 6.7%, the lowest during the current economic expansion and the lowest since August 2007.
US workers who are the least-qualified — at least on a formal-education basis — were hit extremely hard during the recession.
Not only are folks with less formal education likely to be more vulnerable to initial cuts — think, for example, about a company downsizing due to the effects of an economic slowdown: does an executive or their secretary get fired first? — but these folks have a harder time re-entering the workforce as employers maintain leverage over employees while there is a glut of unemployed workers.
In normal economic times (which we’re more or less seeing right now), workers with a college education who want work that requires a college education can likely find that work. When times are tough, however, workers will cut their demands and seek any kind of work at all, crowding out candidates that, at least on paper, will be less attractive to employers.
During the depths of the recession, the narrative that all coffee shops were staffed by PhD’s who couldn’t get a “real” job was everywhere.
But as the unemployment rate for workers with less formal education declines, we’re clearly seeing a labour market that is making big gains across all worker classes as the recovery broadens and deepens.