North Texas Daily

Stock market tumbles, but jobs remain stable for college graduates

Stock market tumbles, but jobs remain stable for college graduates

Members of the board of the Student Investment Group meet up in the Business Leadership building to talk about their organization's upcoming semester plans on Friday, August 28, 2015. Paulina De Alva | Staff Photographer

Stock market tumbles, but jobs remain stable for college graduates
August 30
20:06 2015

Adalberto Toledo | Staff Writer

The recent tumble of the U.S stock market and its slow rebound rattled investors this week, but it won’t have a major impact on the nation’s labor force, job market or economy in the long run.

Professors at UNT agreed that graduates entering the work force shouldn’t be too worried about their chances of landing a job. Guillermo Covarrubias, professor of macroeconomics, said even if the recent Chinese economic slowdown puts a drag on U.S. growth, it might not be enough to weaken the market for skilled workers.

“The market is employing college graduates,” Covarrubias said. “It is unpredictable, but my suspicion is that it won’t have a profound impact on the market for skilled labor.”

The relationship between the United States and China is less a marriage and more a long-distance relationship.  The two nations engage in commerce, most of it being U.S. imports of Chinese goods.

But recent fluctuations in the U.S. markets are due in part to the recent economic slowdown in the Chinese economy.

The Shanghai Stock Exchange Composite index fell 8.5 percent on Aug. 17. The following Monday, which the news media dubbed “Black Monday” in reference to a much worse economic meltdown in 1987,  the American and European markets began to experience the effects of the Chinese slowdown.

“Foreign firms will probably have some difficulty selling in China,” Covarrubias said. “The Chinese are not a big source for American exports, so their overall impact isn’t very big.”

Graduate students Bao Lam, left, Kshitij Menon and Dylan Barnard, right, analyze statistics about the companies the group has talked about in the Buisness Leadership Building on Friday, August 28, 2015. Paulina De Alva | Staff Photographer

Graduate students Bao Lam, left, Kshitij Menon and Dylan Barnard, right, analyze statistics about the companies the group has talked about in the Buisness Leadership Building on Friday, August 28, 2015. Paulina De Alva | Staff Photographer

Investors in the U.S. took notice of the economic slump, but Harold Tanner, professor of modern China, said people should realize most of the profit from Chinese exports do not even go to China.

“The Chinese have a small slice of every dollar sent on a made-in-China product because American companies contract Chinese companies with very small profit margins,” he said.

According to Trading Economics, a website that tracks worldwide economic indicators, the companies in China contracted by U.S. companies account for 17 percent of Chinese exports.

Of 50 students surveyed around campus, 80 percent believed a majority of China’s exports go to the United States. Another 50 students were asked what percentage of U.S. exports went to China. Most surmised it would be less than a majority. Still, 46 percent gave a percentage far above the actual 7 percent.

But this is not to say American manufacturers won’t have a hard time competing with their Chinese counterparts. Due to the devaluation of the Yuan, Chinese goods will be cheaper, and therefore more competitive than the more expensive U.S. goods.

Covarrubias added that the Chinese could continue depreciating their currency, which would ripple around the world to countries trying compete with the lower Chinese prices.

As this graph from Trading Economics shows, over the past 5 years a fall in American exports usually indicates a much larger fall in Chinese exports.

Graphic courtesy of Trading  Economic shows over the past 5 years a fall in American exports usually indicates a much larger fall in Chinese exports.

A fall in American exports usually indicates an even larger fall in Chinese exports according to a chart by Trading Economics.

The United States has been appreciating its currency since the 2008 economic meltdown. Though it will not be a severe setback, the pressure to devalue will put strain on U.S. economic growth.

“U.S. policy makers are keeping an eye on that situation, especially in terms of monetary policy,” Covarrubias said.

As of now, the Federal Reserve is still set to raise the U.S. interest in September.

Featured Image: Members of the board of the Student Investment Group meet up in the Business Leadership building to talk about their organization’s upcoming semester plans on Friday, August 28, 2015. Paulina De Alva | Staff Photographer

About Author

Reporter

Reporter

Related Articles

0 Comments

No Comments Yet!

There are no comments at the moment, do you want to add one?

Write a comment

Write a Comment

Search Bar

Sidebar Thumbnails Ad

Twitter Feed

North Texas Daily @ntdaily
OPINION: COVID-19’s misleading impact on the games industry📝 by @NTdailyZack 🖼 by @AustinBanzonhttps://t.co/bqm8xqTtNh
h J R
North Texas Daily @ntdaily
THE DOSE: Best of streaming services: HBO Max📝 by @OberkromJadenhttps://t.co/QSVZx56dvr
h J R
North Texas Daily @ntdaily
OPINION: Voting for third party is viable alternative📝 by @keaton_gracee 🖼 by @AustinBanzonhttps://t.co/nOXOvTAOUF
h J R
North Texas Daily @ntdaily
THE DOSE: ‘Ramy’ season 2 opens show up to new characters📝 by @Dawsonmturnerhttps://t.co/DUSXlUNySg
h J R

Sidebar Bottom Block Ad

Flytedesk Ad

Instagram