Confidence is high at the end of 2016. An index tracked by the Conference Board which assess the US consumers’ assessment of current conditions and expectations for the future hit a 15 year high in December and is just below the level it was in August 2001. It certainly helps confidence to have a job. The most recent jobless claims report out this week showed a further decline implying a resilient job market. General unemployment in the United States currently stands at 4.6% – back to pre-crisis levels. Age matters, though. The person responsible for managing the Consumer Confidence index noted that the “post-election surge in optimism” was strongest among older Americans. The November unemployment report breaks out the headline 4.6% (which is technically for all workers 16 years of age and over) into categories. Workers in the age groups of 35-44 years, 45-54 years, and 55 years and over are all roughly 3.5-3.6%. No wonder confidence is good. As you move younger, unemployment moves higher. The age group of 25-34 years is 4.8%, marginally above the headline number. Workers in the 20-24 years age group nearly doubles to 8.1%. Finally, workers 16-19 years old nearly doubles again to 15.2%. How much of our nation’s youth faces a significant challenge finding work not only to pay the bills (including potentially hefty school loans) but build a foundation of skills to be employable in the future?
This relates also to the current nature of populism on a global basis. The major political outcomes of 2016 (Brexit, Trump, Italian Constitutional referendum) had a common theme of voters taking back control locally. This is a backlash from the decades-long political narrative of believing in increased globalism and a faith in the policies of an educated elite with consolidated power. Looking towards 2017 and beyond, how will voters in pivotal European elections react? Will they too seek to pull back political control from the European Union? Youth unemployment in the Euro-area as a region is 20.7% with countries like Greece (46.5%), Spain (43.6%) and Italy (36.4%) leading the pack (as of October 2016). Even France, the second largest economy in Euroland, has youth unemployment of 25.8%. Are the voters in these countries willing to risk a lost generation due to the decisions in Brussels?