QQQA - The Teen Canaries In The Coal Mine

• The U.S. economy is at an elevated risk of recession.
• For the combined population of working American teens, we find that the employment level peaked at 5,660,000 in March 2022, falling 102,000 (or 1.8%) to 5,558,000 through June 2022.
• While we do see developing downtrends in portions of the teen employment data, at this point, they're not yet consistent with the kind of employment declines the teen population has seen in previous recessions.

When the U.S. economy falls into recession, there's one demographic group that can expect to feel a lot of pain: working teenagers.

That's because, unlike every other demographic group, teens have the least education, the fewest skills, and the lowest amount of job experience. That combination makes American teenagers the most marginal of all workers and puts them most at risk of either losing their jobs or of never being hired when the economy goes into recession.

In other words, they're the proverbial canaries in the coal mine of the U.S. economy. And the U.S. economy is at an elevated risk of recession.

That's why we've decided to start regularly tracking teen employment levels. Our first chart shows three sets of seasonally adjusted teen employment levels, for the Age 16-17 population (blue), the Age 18-19 population (orange), and the combined Age 16-19 population (black), from January 2016 through June 2022:

By design, this chart puts the employment impact of the Coronavirus Recession right in the middle, showing both its pre-recession trend and the post-recession recovery to put the current trends for teen employment into context.

We see that employment for the youngest teens, those Age 16-17, peaked at 2,316,000 after rising well above its long-term level in April 2022. It has since fallen by 202,000 (or 8.7%) to 2,114,000 through June 2022. This portion of the teen demographic includes the most marginally employed portion of the population.

By contrast, things are still looking up for older teens, which at 3,443,000 in June 2022 is on an uptrend. The Age 18-19 portion of the population has not yet reached the peaks this portion of the U.S. labor force recorded in the pre-Coronavirus Recession period.

For the combined population of working American teens, we find that the employment level peaked at 5,660,000 in March 2022, falling 102,000 (or 1.8%) to 5,558,000 through June 2022. We should note at this point that since all three sets of data have been put through their own seasonal adjustments, the sum of the Age 16-17 and Age 18-19 groups won't add up to the total for the Age 16-19 population. This data however is exactly as the U.S. Bureau of Labor Statistics has reported it - all we've done is visualize it.

Because populations change over time, we're also tracking the U.S. teen employment-to-population ratio, which indicates the percentage of employed teens among their population. Our second chart shows this seasonally adjusted data for each portion of the U.S. teen population.

This data confirms most of the recent trends we described in the raw numbers. For example, employment among the Age 16-17 has trended down since April 2022, falling from a peak of 25.8% to 23.7% in June 2022, coinciding with what we observed in their employment level.

But the data for the older portion of the teen labor force shows something different than what we would have expected from the employment level data. Here, we see that the Age 18-19 employment-to-population ratio peaked at 44.1% in November 2021 before trending downward to June 2022's level of 42.2%. By contrast, the employment level rose by 200,000 from 3,243,000 to 3,443,000 during that time.

Finally, we see the pattern for the combined Age 16-19's employment to teen population follows the same pattern we saw in the employment data. It peaked in March 2022 at 33.2% before falling slowly to 32.6% in June 2022.

While we do see developing downtrends in portions of the teen employment data, at this point, they're not yet consistent with the kind of employment declines the teen population has seen in previous recessions. We'll also observe the data is subject to revision, so this information is best considered to be a snapshot in time based on the available data.

Then again, that's exactly why we're tracking the data in a new series.

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Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

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