Joblessness Boom as Youth Employment 'Impossible', Job Seekers Give Up, Polarization in Manufacturing for 16 Consecutive Months
With youth employment becoming virtually impossible, a chronic cycle of low layoffs and low employment has led to an unemployment boom. With job abandonment concentrated among young people, the manufacturing sector has been declining for 16 consecutive months, deepening polarization.
National statistics show an increase of 190,000 in the number of employed in October. This increase was driven by 334,000 people aged 60 and older and 80,000 people in their 30s. The youth (15-29) age group saw the largest decline, with a 163,000 decrease. Within the stable manufacturing and construction sectors, the construction industry lost 123,000 jobs, marking the 18th consecutive month of decline, a larger decline than last month (84,000).
In particular, manufacturing employment decreased by 51,000 in October, marking the 16th consecutive month of decline. Agriculture, forestry, and fisheries also saw a decline of 124,000, reflecting the threat to production structure posed by the government-led "AI industrial restructuring."
National data released on the 11th showed the youth employment rate at 44.6%, down 1.0 percentage points from a year ago and continuing its downward trend for 18 consecutive months.
Under Lee Jae-myung's administration, the economically inactive population increased by 38,000 to 16.121 million in October. Of this, the number of people who were simply "resting" without seeking work or engaging in any other activity increased by 135,000 to 2.58 million. Due to the youth unemployment crisis, the number of those who "took a break" decreased by 9,000 to 409,000.
However, the number of those in their 30s who "took a break" increased by 24,000 to 334,000, the highest since related statistics began being compiled in 2003, reflecting the exodus of this key labor force from the economy.
The collapse of new hiring in manufacturing, a sector favored by young people for its stability, reflected "low layoffs and low employment," leading to a decrease of 20,000, mainly among those in their 20s and 50s, to 658,000. The unemployment rate fell by 0.1 percentage points year-on-year to 2.2%, and the youth unemployment rate also fell by 0.2 percentage points to 5.3%. The new phenomenon of the unemployment rate falling while the previously unemployed are finding no re-employment opportunities has already been evident in US employment statistics. The Associated Press reported on the 10th that "the unemployed are trapped in a historical anomaly where unemployment is low and the economy is still growing, but the unemployed are facing the slowest hiring pace in more than a decade."
Diane Swonk, chief economist at KPMG, calls this a "jobless boom."
The AP stated, "While layoff announcements at large corporations typically attract the most attention, the reluctance of many companies to expand their workforce has created a more painful 'jobless market' than the low 4.3% unemployment rate suggests, further polarizing the market." "A 'low-employment, low-fired' economy means fewer layoffs among those with jobs, while the unemployed struggle to find work."
"Outsiders who need jobs are struggling to get a foot in the door," Guy Berger, research director at the Burning Glass Institute, told the AP. "It's almost like an insider versus an outsider relationship, even though insiders have been isolated by the low layoff rate so far."
"Economists point to a number of reasons for the hiring slowdown, but most share common threads: increased uncertainty due to tariffs, the potential impact of artificial intelligence, and the current government shutdown," the AP said. "While investment in data centers to power AI is booming, rising interest rates are weakening many other sectors of the economy, including manufacturing and housing."
Reuters reported on the 12th that “U.S. companies are cutting more than 11,000 jobs a week through the end of October, payroll processor ADP said in its latest real-time estimate of labor market trends on the 11th.” “While last week’s ADP report showed the U.S. overall added 42,000 jobs in October compared to the previous month, the new estimate shows how hiring trends are changing week by week, and in this case, suggests further weakening in the labor market, which is being closely monitored by Fed policymakers,” it said. Reuters reported on the 4th, "According to the ADP National Employment Report, employment rebounded by 42,000 jobs in October after a 29,000-job decline in September, but employers shed jobs in the professional and business services, information, and leisure and hospitality industries for the third consecutive month." Economists cited economic uncertainty, tariffs, and companies embracing artificial intelligence as reasons for the decline in labor demand, while a sharp decline in workers due to raids targeting undocumented immigrants is also weighing on the labor market."
An Institute for Supply Management survey reported on the 5th that while U.S. service sector activity rose to an eight-month high in October, driven by robust new orders, the weak hiring reflects a weak labor market situation amidst economic uncertainty stemming from tariffs.