Got job? Millennials remain optimistic, new study finds

Even though millennials see higher unemployment rates, many remain optimistic about their job prospects, according to a new Federal Reserve Board report.

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Factors, such as automation and the trend of contingent workers, have affected employees, especially millennials who are the newest entrants to the workforce.

The Fed used unemployment rates from August, when the U.S. rate was 4.9 percent. (See chart at right.) The rates were lower in November, but the trends are similar: The jobless rate was 14.4 percent for people 18-19, 4.8 percent for those 25-34 and 4.6 percent for the nation, according to data the U.S Bureau of Labor Statistics.

The Fed commissioned GfK to survey over 2,000 people in 2015 to compare to a similar poll in 2013. The 120-page report provides a snapshot of the employment, education and financial independence of people age 18 to 30.

Overall, those adults were more optimistic about future job opportunities in 2015 (61 percent) than in 2013 (45 percent). Moreover, people who were employed, enrolled in college or who had some college education were the most optimistic.

And, as other surveys have shown, millennials aren’t so different from earlier generations in wanting employment stability. They prefer permanent, steady jobs (62 percent) to higher-paying  jobs (36 percent) and to contingent or contact work.

Other key findings from the 2015 survey include:

  • 61 percent are positive about future employment opportunities vs. 45 percent in 2013. People with permanent (68 percent) or full-time (65 percent) jobs were more optimistic about their future than those with temporary (43 percent) or part-time (54 percent) jobs.
  • More millennials see value in higher education than in 2013. Half said the financial benefits of education outweigh the costs, up from 41 percent in 2013. Despite that knowledge, people without postsecondary training list cost, a lack of time and course scheduling as obstacles.
  • Over 30 percent didn’t not receive information about jobs/careers in high school or college.fed-living-expenses
  • 45 percent work in a field closely related to their educational and training background.
  • Nearly half of part-time workers were considered underemployed, and would prefer to work more hours.
  • 73 percent can cover monthly expenses with their income vs. 64 percent in 2013, but many receive financial support from their families. And more of them can cover long-term expenses in an emergency (See chart at right.).

The bottom line: Most millenials aren’t sure how their standard of living will stack up against their parents’, according to the survey. Those whose parents have a high school education or less are more likely to expect a higher standard of living (19 percent) than those with at least one parent with a bachelor’s degree (17 percent).

Let’s get real about interest rates

Yes, the Federal Reserve on Wednesday raised the key federal funds rate (by 0.25 percent).

Yes, it’s the second rate hike since last December.

However, the federal funds rate still is below 1 percent after hovering near zero since late 2008. And while higher rates will affect consumer loans such as student loans, car loans and home mortgages, the Fed repeatedly has said that future increases will be “gradual.”

The Fed “sees the potential for a modest uptick in prices and activity over the next 12-24 months,” Lindsey Piegza, chief economist at Stifel Fixed Income, said in a statement. “But in the long-run, the Fed’s forecast for a moderate (read: blah) trajectory of the economy remains.”

Much of what I wrote in this article for The Dallas Morning News a year ago on how higher rates might affect consumers still holds true today.

Interest rates generally are still low.

Look at the 30-year mortgage rate. It peaked at 18.5 percent in October 1981. Today, it’s 4.16 percent vs. just under 4 percent a year ago.

Will the latest Beige Book put pressure on the Fed to act next month?

The U.S. economy continued to grow — albeit at a moderate or modest pace — across most regions of the country from early October through mid-November, according to data released Wednesday by the Federal Reserve.

The latest Beige Book report combined with other strong economic data could pressure Fed leaders to raise interest rates, which have been near zero since 2008, when they meet in two weeks. Some Fed leaders are growing increasingly impatient: Two bankers dissented at the last Federal Open Market Committee meeting on Nov. 1-2 because they wanted to raise the federal funds rate by 0.25 percent.

The Beige Book is based on economic, employment, wage and price reports from 12 Federal Reserve banks nationwide. The San Francisco district, which covers seven western states plus Alaska and Hawaii, reported moderate economic growth. Inflation remained at bay, with slight upward price pressure in most areas.

Here’s some key economic data for the nation and the San Francisco district:

Real estate and construction: U.S. residential real estate activity improved across most districts, including San Francisco, with more single-family construction and higher home prices. The real estate market was particularly strong in the Intermountain West. Commercial construction increased in seven districts, including San Francisco, but shortages of labor and materials dampened growth in some parts of the western district.

Continue reading Will the latest Beige Book put pressure on the Fed to act next month?

Finish this sentence: The U.S. gig economy is growing faster than …

That might be a difficult task due to conflicting data.

Two government agencies plan new research to more accurately count the companies and workers in the so-called gig economy, which also has been labeled the on-demand economy, and better understand trends of that realm.

The “share of U.S. jobs without a formal employer-employee relationship is large and growing,” but some data shows the opposite, Jim Spletzer, an economist for the U.S. Census Bureau’s Center for Economic Studies, wrote in a recent government blog post. Jobs in the so-called gig economy include freelance and contract workers.

Continue reading Finish this sentence: The U.S. gig economy is growing faster than …