How Did U.S. Teenagers Benefit from Holiday Employment?

January 17, 2025
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The U.S. labor market’s tightness has diminished from its peak in March 2022, when the ratio of job openings to unemployed workers hit a historic high of 2.0. Since that time, job openings and hiring have fallen, plus fewer people have been quitting their jobs. As a result, this ratio has returned to levels before the COVID-19 pandemic, both nationally and in the states that make up the Eighth Federal Reserve District.The Eighth District states are Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee.

One potential outcome of a labor market with more “slack” is an erosion in employment opportunities, especially for those with the least education and work experience. Teenagers (ages 16 to 19) fit this profile. Community Development research from the St. Louis Fed shows that employment outcomes for workers with less education and experience are more sensitive to changes in job openings: A 1 percentage point decline in an area’s job openings has a more adverse impact on their employment prospects than it does for other groups.

This blog post shows teenage employment as a share of the civilian population (their employment-to-population ratio) has trended downward since the labor market’s March 2022 peak.

I attribute a portion of this decline to the large presence of teenagers in the retail trade and leisure and hospitality industries. These sectors have experienced the largest declines in job openings and hiring. Quits in these sectors fell, too. The Eighth District’s pattern follows the national pattern.

However, hiring in the retail trade and leisure and hospitality sectors typically picks up before the holidays, usually around September. Was the ramp up in holiday-related jobs this season large enough to reverse the decline in the teen employment-to-population ratio and prevent a weakening in the overall job market?

Labor Market Slack Has Grown

Using data from the Bureau of Labor Statistics (BLS), I estimated the ratio of job openings in the economy to the number of unemployed workers. After reaching maximums of 2.0 nationally and 2.2 among Eighth Federal Reserve District states in March 2022, these ratios had fallen to 1.1 and 1.2 by November 2024 and October 2024, respectively.State-level data from the BLS lags the national data, and at the time of this analysis October was the most recent state-level data available. At their peaks, roughly two job openings existed for each unemployed person. Now, the ratio signals an approximately 1-to-1 relationship. In other words, a significant amount of slack has returned to the labor market.

According to the BLS Job Openings and Labor Turnover Survey (JOLTS), in November 2024 there were 4.1 million fewer job openings nationally than there were in March 2022. Over the same period, the number of hires declined by 1.4 million, quits fell by 1.4 million, and layoffs edged up 377,000. In Eighth District states, openings, hires and quits all fell, while layoffs remained flat.

The Employment-to-Population Ratio of Teens Has Declined

The following figures each report the cumulative change in teenagers’ employment-to-population ratio for two periods: March 2022 to December 2024 and the 12 months ending December 2024. Adding the 12-month data helps us assess whether the erosion in teen employment-to-population ratios has built up slowly since the March 2022 peak in labor market tightness or is something more recent.

The first figure below shows that the national employment-to-population ratio for all individuals 16 and over basically remained constant over the March 2022 to December 2024 period. However, the employment-to-population ratios for many teenagers fell during that period. The ratios for Black and Hispanic teenage men deteriorated the most, particularly in the most recent 12 months.I checked my estimates using publicly available microdata against BLS-published estimates because I calculated employment-to-population ratios by gender, race and ethnicity, and those sample sizes can be small. As a result, all microdata estimates are sample-weighted, and I present series for which I constructed three-month moving averages to smooth out and reduce variability from smaller sample sizes.

Cumulative Change in U.S. Teen Employment-to-Population Ratios by Race and Gender

A bar chart shows percentage point ratio changes for all 16-plus individuals and for Black, white and Hispanic male and female teens in the U.S. for the 12 months ending December 2024 and for March 2022 to December 2024. There were declines in both periods for Black teen men, Hispanic teen men, and Hispanic teen women. White teen women had increases in both periods. White teen men and Black teen women saw increases in the period starting March 2022.

SOURCES: Bureau of Labor Statistics and author’s calculations.

For states making up the Eighth District, the employment-to-population ratio estimates also suggest an employment slowdown for many teens, but one that was most felt in the December 2023 to December 2024 period. (See the next figure.) The ratios for teen Hispanic men, teen Black women and teen Black men fell the most dramatically in the most recent 12 months.

Cumulative Change in Eighth District Teen Employment-to-Population Ratios by Race and Gender

A bar chart shows percentage point ratio changes for all 16-plus individuals and for Black, white and Hispanic male and female teens in the Eighth District for the 12 months ending December 2024 and for March 2022 to December 2024. There were declines in both periods for white teen men, white teen women and Black teen men. Hispanic teen women saw increases in both periods. Hispanic teen men and Black teen women had declines in the 12-month period.

SOURCES: Current Population Survey microdata and author’s calculations.

Almost Two-Thirds of Teenagers Are Employed in Leisure and Hospitality and Retail Trade

Why are the employment-to-population ratios of teenagers falling? One answer is that the industries with the largest concentration of 16- to 19-year-old workers have experienced slower job growth and declines in job openings and employment. Teen employment is concentrated in the leisure and hospitality and retail trade sectors, and to date, these two sectors have had employment soften the most.

The following table reports the heavy concentration of teens in these two industries. To construct the estimates, I used monthly microdata files from the Current Population Survey (CPS)—which is conducted jointly by the BLS and U.S. Census Bureau—for January 2024 to April 2024 and limited the sample to teenagers. For this four-month period, I estimated the percentage of teens employed in each detailed industry category. Roughly two-thirds of Black, white and Hispanic teen men were employed in retail trade or leisure and hospitality. Almost 70% of teen Black men worked in one of these two industries. Teen women were highly represented in these industries as well, but also in private education and health services. Labor market conditions in the latter sector have loosened, but not by nearly as much as in the retail trade and leisure and hospitality sectors.

Teen Employment Distribution by U.S. Industry Category
Industry White Teen Men Black Teen Men Hispanic Teen Men White Teen Women Black Teen Women Hispanic Teen Women
Construction 8.3% 4.3% 10.3% 0.9% 0% 0.9%
Educational and Health Services 5.5% 6.3% 4.9% 17.2% 18.0% 16.5%
Financial Activities 1.1% 0.7% 1.4% 1.2% 1.0% 1.4%
Information 1.1% 1.6% 0.5% 1.2% 0.5% 0.7%
Leisure and Hospitality 36.5% 39.8% 40.1% 43.7% 40.4% 42.9%
Manufacturing 5.5% 1.8% 5.2% 1.9% 4.5% 3.5%
Other Services 4.4% 6.6% 5.3% 4.2% 1.5% 2.5%
Professional and Business Services 4.0% 3.4% 5.8% 3.3% 2.7% 1.6%
Public Administration 0.7% 1.9% 0.2% 0.4% 2.1% 0.4%
Transportation and Utilities 3.0% 3.9% 3.6% 1.4% 1.7% 2.0%
Wholesale and Retail Trade 26.4% 29.8% 20.3% 23.2% 27.6% 27.0%
SOURCES: Current Population Survey microdata and author’s calculations.
NOTE: This list of major industries comes from aggregating 2022 North American Industry Classification System (NAICS) codes.

The next table estimates the change in the job openings rate, quits rate and hiring rate over two periods: April 2020 to March 2022 and April 2022 to November 2024. It shows that the retail trade and the leisure and hospitality sectors are among the industries most affected by the slowdown in these areas. During the period prior to the March 2022 peak in labor market tightness, job openings and hires rose healthily and quits increased. Since then, total private sector job openings contracted by 2.6 percentage points. Retail trade and leisure and hospitality were both among the nine industries that saw contractions in job openings of 2.9 percentage points or larger. The decline in quits and hiring rates was largest for accommodation and food services and leisure and hospitality. Retail trade declines in quits and hires were the third largest and ninth largest, respectively.

Change in the U.S. Job Openings Rate, Quits Rate and Hiring Rate by Industry
Industry Percentage Point Change in Job Openings Rate Percentage Point Change in Quits Rate Percentage Point Change in Hiring Rate
April 2020 to March 2022 April 2022 to November 2024 April 2020 to March 2022 April 2022 to November 2024 April 2020 to March 2022 April 2022 to November 2024
Accommodation and Food Services 6.4 -4.3 2.4 -2.0 2.9 -2.2
Arts, Entertainment and Recreation 3.3 -1.8 0.8 -1.2 5.1 -0.9
Construction 2.2 -2.2 1.9 -1.3 1.9 -0.6
Durable Manufacturing 4.6 -4.4 1.6 -0.9 0.6 -1.8
Finance and Insurance 2.5 0.1 1.0 -0.7 1.0 -1.1
Financial Activities 2.6 -0.1 1.1 -0.9 1.1 -1.3
Government 1.6 -0.8 0.3 -0.3 0.8 -0.3
Health Care and Social Assistance Services 5.2 -2.9 0.8 -0.9 1.1 -0.5
Information 3.8 -4.2 0.3 -0.6 2.2 -0.9
Leisure and Hospitality 6.0 -4.0 2.2 -1.9 3.1 -2.0
Manufacturing 4.2 -4.1 1.8 -1.2 0.9 -1.8
Mining 5.0 -2.4 1.4 -0.3 1.9 -0.7
Nondurable Manufacturing 3.6 -3.9 2.2 -1.6 1.3 -1.7
Other Services 4.5 -2.6 1.4 0.3 0.9 -0.4
Private Education and Health Services 4.6 -2.6 0.6 -0.8 0.9 -0.5
Private Education Services 1.5 -0.1 0.3 -0.6 0.5 -0.3
Professional and Business Services 5.5 -1.6 1.6 -1.6 1.7 -1.7
Real Estate and Rental and Leasing 2.6 -0.7 1.0 -1.5 1.4 -1.6
Retail Trade 4.7 -2.9 2.0 -1.8 -0.4 -1.2
Trade, Transportation and Utilities 3.7 -2.8 1.6 -1.1 0.2 -1.0
Transportation and Warehousing 2.0 -2.9 1.3 -0.3 0.1 -0.5
Wholesale Trade 2.9 -2.8 1.0 -0.5 1.2 -1.0
Total Nonfarm 4.0 -2.4 1.4 -1.1 1.3 -1.0
Total Private 4.3 -2.6 1.5 -1.2 1.3 -1.2
SOURCES: Bureau of Labor Statistics’ JOLTS and author’s calculations.
NOTES: Industry categories are based on 2022 North American Industry Classification System (NAICS) codes. Some larger categories have been disaggregated into more granular categories. For example, the private education and health services sector has been disaggregated into the private education services and the health care and social assistance services industries.

What Can Reverse the Pattern of Teenager Employment Declines?

An obvious answer to reversing employment declines is a successful holiday season. A variety of forecasts suggested stronger spending during the most recent holiday season compared with 2023 holiday spending. For example, a recent National Retail Federation consumer surveyThe survey was conducted by Prosper Insights & Analytics. predicted that winter holiday consumer spending would reach a record $902 per person, $25 per person more than the previous year’s estimate. The season’s forecast was $16 higher than the record set in 2019. The question is whether these forecasted consumer trends translated into job creation.

What job growth was required to help reverse the decline? To answer this question, I estimated the monthly job growth, not seasonally adjusted, in the retail trade and the leisure and hospitality industries for October through February for each year from 2018 to 2023.For these two sectors, I used employment that is not seasonally adjusted to obtain the number of jobs created each month, which includes both the unexpected and expected growth. I then computed the average job growth in a given month across the six years.

The next figures report this average monthly job growth. For example, as represented by the green bar in the first figure below, the average retail job growth from September to October for the 2018 to 2023 period was 168,000. From October to November, the average job growth in the sector over that period was 360,000. As expected, the average job growth begins to tail off in December, and employment contracts in January and February. I interpret these estimates as the minimum required job growth in retail trade that would yield an increase in the teen employment-to-population ratio.

The red bars show actual retail trade employment growth in October, November and December 2024. Actual job creation in October 2024 and November 2024 was below each month’s average growth from 2018 to 2023. Even though the December 2024 estimate of 148,000 jobs exceeds the December historical average, it is not large enough to offset weaker growth in the previous two months.

Retail Trade Job Growth Needed to Improve the Teen Employment-to-Population Ratio

A bar chart shows October 2024 growth in retail jobs at 133,000 compared with an average growth of 168,000 for the same month in 2018-23, November 2024 growth of 280,000 compared with an average of 360,000 for the month, and December 2024 growth of 148,000 compared with an average of 93,000 for the month. Averages for January and February are -500,000 and -104,000, respectively.

SOURCES: Bureau of Labor Statistics and author’s calculations.

NOTES: Data are not seasonally adjusted. Employment changes are measured relative to the previous month.

The final figure below reports the same measures for the leisure and hospitality sector. In this sector, employment, not seasonally adjusted, historically exhibits a contraction from October to January (the green bars). For deterioration in the teen employment-to-population ratio to reverse, this industry can experience a decline, but it can’t be larger than the historical monthly average drop in employment. Specifically, in October, leisure and hospitality employment can’t decrease by more than 40,000 jobs, or by more than 172,000 in November and 90,000 in December (or by 302,000 cumulatively for the three months). The red bars suggest that employment in the sector has contracted by more than the historical pattern measured from 2018 to 2023.

Leisure and Hospitality Job Growth Needed to Improve the Teen Employment-to-Population Ratio

A bar chart shows an October 2024 decline of 128,000 leisure and hospitality jobs compared with an average decline of -40,000 for the same month in 2018-23, a decline of 190,000 for November 2024 compared with an average decline of 172,000 for that month, and an increase of 23,000 for December 2024 compared with an average decline of 90,000 for that month. The average for January is a decline of 354,000 and the average for February is growth of 220,000.

SOURCES: Bureau of Labor Statistics and author’s calculations.

NOTES: Data are not seasonally adjusted. Employment changes are measured relative to the previous month.

The estimates for the Eighth District indicate that retail trade job growth was behind its recent historical growth, while leisure and hospitality job growth matched past growth.

Combining the two sectors’ October, November and December estimates indicates that U.S. and Eighth District job growth was not large enough to reverse the decline in teens’ employment-to-population ratios. It is possible, however, the shedding of workers that typically occurs in January and February will not be as large as in previous years.

Notes

  1. The Eighth District states are Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee.
  2. State-level data from the BLS lags the national data, and at the time of this analysis October was the most recent state-level data available.
  3. I checked my estimates using publicly available microdata against BLS-published estimates because I calculated employment-to-population ratios by gender, race and ethnicity, and those sample sizes can be small. As a result, all microdata estimates are sample-weighted, and I present series for which I constructed three-month moving averages to smooth out and reduce variability from smaller sample sizes.
  4. The survey was conducted by Prosper Insights & Analytics.
  5. For these two sectors, I used employment that is not seasonally adjusted to obtain the number of jobs created each month, which includes both the unexpected and expected growth.
ABOUT THE AUTHOR
William M. Rodgers III

William M. Rodgers III is vice president of Community Development Research at the St. Louis Fed. Read more about the author and his work.

William M. Rodgers III

William M. Rodgers III is vice president of Community Development Research at the St. Louis Fed. Read more about the author and his work.

This blog offers commentary, analysis and data from our economists and experts. Views expressed are not necessarily those of the St. Louis Fed or Federal Reserve System.


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