Last month’s increase in unemployment was especially discouraging for the very educated.
The jobless rate for Americans with at least a bachelor’s degree rose to 5.1%, the highest since 1970 when records were first kept, reports the Bureau of Labor Statistics. October’s 4.7% rate was up from 4.4% in September. Meanwhile, the national unemployment rate last month rose to 9.8% from 9.6%.
Joblessness among those with advanced educations probably drove the overall rate higher, as that group makes up 30% of the labor force, the single biggest sector, says Mark Zandi, chief economist of Moody’s Analytics. The government’s figures show there were 2.4 million unemployed people last month with bachelor’s degrees and higher.
"It’s another signal that the labor market recovery remains moderate," says Dean Maki, chief U.S. economist for Barclays Capital.
The well-educated have been insulated from the worst effects of the recession, which battered manufacturing and construction workers. And unemployment is still far lower for the college-educated than for high school graduates (10%) and those without high school diplomas (15.7%).
Yet, the educated may now be bearing the brunt of a sluggish recovery. The jobless rate for high school graduates improved from 10.1% in October and is down from 10.9% in June. Maki partly credits a robust turnaround for restaurants, which added 34,000 jobs the past two months. And manufacturers added 134,000 from January to May.
At the same time, unemployment in the "management, business and financial" category leapt to 5.5% in November from 4.3% in September and is the highest on records back to 2000. Those figures are not seasonally adjusted. The broad category includes accountants and managers in human resources and food services. Many are occupations that require a college education.
Jorge Perez, a senior vice president for Manpower, says employers have cut layers of managers and melded jobs, reducing the need to hire. And, he says, some unemployed computer workers, for example, lack skills for the fast-changing field.
Harry Griendling, CEO of DoubleStar, a human resources consultant, cites employers’ tendency to trim staff and enlist contractors for projects, partly due to uncertainty about taxes and health care reform. Many, he says, are more likely to make such cuts toward year’s end as they plan annual budgets.
Zandi suspects many of the cuts were by state and local governments, which trimmed payrolls by 13,000 last month. He expects another 250,000 such layoffs in the next year.