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Americas youngest workers started the year with a rare opportunity to slingshot their careers in the hottest job market in decades.
Theyll end 2020 facing some of the nations bleakest employment prospects and the most volatile job market ever for recent college graduates.
The unemployment rate for young people ages 20-24 was 12.5% in September, the highest among adults. Joblessness for them peaked at nearly 26% at the height of the pandemic in Aprilquadruple the level two months earliera bigger jump than in any previous recession back to the 1940.
Although the overall U.S. labor market is gradually improving, it remains far below its pre-pandemic health. Jobless claims fell to 787,000 in the week ended Oct. 17 at the same time that the number of Americans on extended unemployment benefits rose, according to Labor Department data.
Economists say the longer young people are forced to delay their careers, the worse their prospects will be in the future to hold a job, accumulate wealth, or even get married or start a family.
For Tessa Filipczyk, this year was supposed to springboard her career in marine and coastal science. Graduating in June from the University of California at Davis, Filipczyk, 22, had applied for jobs related to ocean conservation, marine plant research and climate change advocacy. But none of those have panned out.
Now, shes tutoring three children she used to baby-sit, and its just eight hours of work a week.
I was like OK, Im going to find a job; Im going to work for a year and then Im going to go to grad school, said Filipczyk, whos living with her parents in Burlingame, California. That all just got swept under the rug by COVID.
Long-run potential
The labor market of 2020 is a gallery of shattered expectations and the fate of young people like Filipczyk could stifle the long-run potential for the economy, which needs a growing labor force to expand.
There is a structure to the labor marketif you miss the entrance, how do you get back in? said Julia Coronado, founder of MacroPolicy Perspectives. If you veer off the career path by necessity, how do you get back into the pipeline?
The dramatic swings in unemployment this time around for adults in their early 20s illustrate how volatile the job market is for graduates and nongraduates alike.
For recent college graduates, unemployment during the pandemic peaked at 20% in June, the highest of any age group with at least a bachelors degree, Labor Department data show. That compares with a 13% peak in the recovery after the last recession.
To be sure, workers younger than 20 saw an even bigger spike in unemployment rates, and young people typically always get hit hard during a downturn.
Long periods of unemployment, or working part-time gigs or temporarily in jobs outside their desired fields, can jeopardize young professionals future salary increases and opportunities for them to build key relationships.
They take jobs that will help them live and pay the bills, and when times get better they try and switch over to a preferred career path, said Ernie Tedeschi, a policy economist at Evercore ISI. They havent built the skills and the professional networks and that puts them at a persistent professional disadvantage.
During prior recessions, recent graduates were able to build connections through coffees and other in-person networking events. But thats more difficult during a global pandemic. Otherwise-normal parts of job hunting, such as interviewing in person, are also more complicated.
The longer the pandemic drags on, the larger the backlog of young people, according to Economic Policy Institute senior economist Elise Gould. Older workers could take jobs that would typical go to entry-level applicants, Gould said.
Left out
Employers dont necessarily even have to pay more to get workers with more experience, Gould said. So those young workers may be left out.
Job seekers who face high unemployment rates at the start of their careers may endure lower salaries during the first decade of their professional lives, said Jesse Rothstein, an economist and professor at the University of California at Berkeley who recently wrote a paper about the impact on college graduates in the wake of the 2008 financial crisis.
Employment rates for those who graduated college in the aftermath of the 2008 financial crisis remained significantly lower over the past decade compared with older workers, Rothstein found. The last recession also prompted many young people to go back to school, while others changed professions frequently.
Zainab Ghadiyali, 35, from San Francisco, is a case in point. After graduating in 2009 with a degree in chemistry, she struggled to find a research job before eventually landing a position at a nonprofit. She later went back to school to study computer science.
Now, after working eight years in tech, shes taking a career break entirely. Shes writing a blog and pursuing other hobbies before deciding her next move.
Getting rejected constantly and being in that emotion was pretty hard, Ghadiyali said of her early post-grad challenges. Learning how to write code was far easier.
Plastic toy plane on the globe. Flight travel concept. Travel by airplane. Takeoff and landing of the aircraft. Return home from flight. Long wide banner with copy space
The resurgent COVID-19 pandemic is pushing back the recovery in air travel, turning winter into a survival test for carriers now pinning hopes on a spring rebound.
Airlines are urging governments to introduce more testing and travel bubbles to help spur demand. The industry is on track to burn through an estimated $77 billion in cash the second half. The International Air Transport Association has called for fresh government support, while stressing the safety of flying.
The pain is evident across the globe, where airlines have rescinded earlier forecasts that called for traffic to gradually increase toward normal levels during the fourth quarter. Instead, carriers are retrenching and shoring up their finances.
Hong Kongs Cathay Pacific Airways Ltd. will slash more than 5,000 jobs and close a regional carrier to reduce its cash burn. British Airways parent IAG SA no longer expects to break even during the last three months of the year and has slashed capacity. American Airlines Group Inc. authorized the sale of $1 billion in shares as it burns up to $30 million a day this quarter.
One exception is in China, where the pandemic is in check and domestic flights have surged past where they were a year ago. In the U.S., airlines carried 1 million passengers on a single day for the first time since March. Still, air travel is at about the level it was more than three decades ago.
It is still very unclear as to whether China is a model for what recovery will look like in other short- to medium-haul markets such as the U.S. or Europe, or whether aspects of its geography and culture make it different, Nick Cunningham, an analyst at Agency Partners, wrote in an Oct. 23 note.
There are some signs of progress toward standards that would unlock long-distance travel, which has lagged behind domestic and regional flying. An international protocol will be ready in the next four weeks, said Gloria Manzo, the chief executive officer of the World Travel & Tourism Council.
We cant wait for a vaccine, Manzo said at the Future Hospitality Summit on Monday. Travel corridors between London and Dubai, as well as London and Newark, New Jersey, are ready but hinge on government signoffs, she said.
The pace of a reopening will factor into production plans for planemakers Airbus SE and Boeing Co. Airbus is preparing to ramp up output next year of its most important jet, the A320neo, in a sign of growing confidence that jetliner demand is poised to recover. The European planemaker stressed that the plans are tentative and no decisions have been made.
Boeing is getting ready to unground its workhorse 737 Max jet, which has been sidelined for 17 months after two fatal crashes. U.S. and European regulators are in the final phases of approving the planes re-entry into service. Chinese authorities say the plane is a priority but have no clear timetable for its return.
FILE - This Tuesday, May 12, 2020, file photo shows the Tesla plant, in Fremont, Calif. Some Tesla workers and labor activists say the company is threatening to fire employees who havent returned to the companys California factory since it reopened because they're afraid of catching the coronavirus. (AP Photo/Ben Margot, File)
A surge in outdoor activities because of the coronavirus pandemic fueled new interest in recreational vehicles, helping Winnebago Industries post solid results for its fourth quarter and fiscal year.
The maker of motorhomes, towable RVs and travel trailers reported Wednesday that fourth quarter revenue increased 39% to $739 million.
Winnebagobased in Forest City, Iowa, but with its management offices in Eden Prairiesaid some of that increase is tied to the acquisition of luxury motorhome maker Newmar Corp. last November.
Absent the acquisition, though, the companys revenue still increased 15% in the quarter, with the strongest performance in the towable RV segment.
In the face of the unprecedented impacts of the COVID-19 pandemic, our strong fourth-quarter finish to the year was a testament to the incredible resolve of our world-class team, the strength of our portfolio of leading outdoor lifestyle brands, and our efficiency in quickly and safely resuming operations to meet tremendous consumer demand, said Winnebago Chief Executive Michael Happe in a news release.
The pandemic fueled a resurgent interest in outdoor pursuits and products from bicycles to motorhomes. The RV Industry Association recently projected that total RV shipments across the industry for 2020 would be 424,400 units, a 4.5% growth in units over 2019, despite an industrywide shutdown of almost two months due to the coronavirus pandemic.
The industry group sees see the sales trends continuing into next year, projecting a record 507,200 units sold in 2021, a 19.5% increase over the projected 2020 total.
This new forecast confirms what we have been seeing across the country as people turn to RVs as a way to have the freedom to travel and experience an active outdoor lifestyle while also controlling their environment, said RV Industry Association President Craig Kirby in a news release.
Airline travel and hotel stays are down due to the pandemic, as companies curtailed discretionary travel and others curtailed recreation travel. However, some families have turned to RVing as an alternative to maintain social distance and other recommendations to stem the spread of the virus.
Our consumers combined the imperative of the safety of their families with their strong desire to be immersed in the experiences they could control, and consequently flocked to the outdoor recreation lifestyle like never before, Happe told analysts.
Winnebago earned $42.5 million, or $1.25 per share, in the fourth quarter, an increase over the $31.9 million, or $1.01 per share, earned in the same quarter last year. Adjusted EPS for the fourth quarter was $1.45 per share, a 45% increase over the year-ago quarter, and more than 50% better than the 93 cents per share analysts were expecting.
For the full fiscal year, Winnebago had total revenue of $2.4 billion, including $388.4 million in revenue from the Newmar acquisition. The company earned $61.4 million, or $1.84 per share, compared to $111.8 million, or $3.52 per share in fiscal 2019.
Adjusted EPS for fiscal 2020 was $2.58 per share down from the $3.45 in fiscal 2019, the adjusted EPS excludes financing and acquisition related costs.
Winnebago in November 2019 acquired Newmar for $270 million in cash plus 2 million shares of Winnebago stock. Revenue for the Motorhome segment was $302 million in the fourth quarter, a 50% increase over the fourth quarter last year fueled by the contribution of $126 million in revenue from Newmar during the quarter.
The Towables segment, which represents 56% of overall fourth-quarter revenue, saw its revenue increase 35% during the quarter to $414 million. The company said backlog for orders in Towables segment increased to a record $748 million, as dealers saw sizable inventory reductions in order to meet demand.
Winnebago hasnt provided earnings guidance for 2021, but Happe also expressed confidence that renewed interest in all things outdoors will continue.
As we look ahead to fiscal 2021, we are encouraged by the ongoing outdoor recreation demand trends we are experiencing, he said in the news release. We have built a strong and growing position in the RV market, and our customers continue to view all our brands as a trusted and safe way to have extraordinary experiences as they travel, live, work, and play in the outdoors.
