"There are two Americas in 2024: the one for people with jobs, homes and stock portfolios, and the one for everyone else," per Bloomberg
"There are two Americas in 2024: the one for people with jobs, homes and stock portfolios, and the one for everyone else," per Bloomberg.
There are two Americas in 2024: one for people with jobs, homes, and stock portfolios, and another for everyone else. The latest example of this two-track economy comes from this week’s Job Openings and Labor Turnover Survey, which revealed that US hiring fell in March to one of the weakest rates in the past decade. This exacerbates an already challenging situation for a generation of young people just beginning to build wealth.
Unemployment remains low at 3.8% because companies aren’t firing workers, and very few are quitting. However, the hiring rate of 3.5 per 100 current employees is reminiscent of the "jobless recovery" from the global financial crisis a decade ago. This is a daunting prospect for those recovering from layoffs or entering the labor market for the first time, including recent or upcoming Generation Z graduates.
This is just one aspect of how the post-pandemic economy has created stark divides. Despite the challenges posed by inflation and the pandemic, many middle-aged and older American asset owners have fared well. While they may feel stuck in low-cost homes or jobs they’re reluctant to leave, many have seen substantial financial gains.
From 2019 to 2023, household net wealth grew by approximately $37 trillion to $147.1 trillion, thanks to surging home and stock values, with baby boomers, Generation X, and millennials benefiting in that order. However, young adults, the poorest, and the unemployed are likely to have missed out on these gains.
Young adults face high rents and are effectively barred from homeownership by 7% mortgage rates. Any investments they can make now would be in a market rally that some strategists believe is nearing its peak. Even without considering the serious issues of war and peace in the Middle East, it’s no surprise that anxiety is high on college campuses. The Generation Z cohort graduating today hears about low unemployment and a booming stock market, but they are not experiencing these benefits.
This may explain the gloomy economic sentiment seen in many surveys. The Conference Board’s measure of US consumer confidence weakened in April to its lowest level since mid-2022, with the share of participants expecting more job availability in the next six months falling to its lowest since 2011.
Among those under 40, expectations of being unable to make minimum debt payments in the next three months are at their highest since the start of the COVID-19 pandemic, according to the Federal Reserve Bank of New York's Survey of Consumer Expectations. A Pew Research Center survey conducted from October 24 to November 5 showed that about 57% of young adults aged 18-24 live at home with their parents, up from 53% three decades ago. Around half report receiving help from their parents with household expenses such as groceries. Social media is filled with posts expressing frustration about the situation.