The U.S. labor market is really bad in most industries; worse in some
Since the end of February, the layoff announcements are in the area of professional business services, durable goods manufacturing, and nondurable goods manufacturing; however, the job destruction across the big firms is broad-based. What a number, and the weight of Citigroup’s layoffs, 52,000, is huge, 10%. Nevertheless, (almost) no industry is unscathed this time.
Below are a series of graphs that compare the severity of job loss in this recession (07-TBA) to previous recession since 1950 in the following industries of the BLS nonfarm payroll report: durable goods manufacturing, construction, business and professional services, finance activities, and government. Most industries are losing jobs consistent with a pace that rivals only the worst labor contractions, 57-58, 73-75, 81-82, while others are worse.
Total Nonfarm Payroll
The chart (above) illustrates nonfarm payroll growth around the start of the economic recession, point 0 = 100 (you can see the recession dates here). I include the 12 months previous to the recession’s start (-12 through -1) and 24 months following the recession’s start (1-24). Recessions since 1950 lasted between 6 and 16 months.
The current labor cycle is rivaling record depth and length of previous recessions. Some recessions are very deep with massive job loss, but start to recover within 10 months of the recession’s onset, e.g., 57-58 recession. Others are more shallow, but the job loss is prolonged, lasting almost two years after the recession’s end, e.g., 2001.
The current labor contraction, 07-TBA, is looking like it will rival the deepest, 53-54, 57-58, and 80-81; and since the length of the recession is expected to last at least 18 months, the labor contraction is by definition going to be prolonged.
- Job loss in February = 651,000
- Total job loss since December 2007 = 4.4 million, or -3.2% of payroll
- Total job loss since October 2008 = 2.6 million
- Job loss in February = 132,000
- Total job loss since December 2007 = 981,000, or -11.2% of payroll
- Total job loss since October 2008 = 553,000
- Job loss in February = 104,000
- Total job loss since December 2007 = 904,000 or -12.0% of payroll
- Total job loss since October 2008 = 447,000
Business Professional Services is seeing its worse contraction since 1950
- Job loss in February = 180,000
- Total job loss since December 2007 = 1.1 million or -5.9% of payroll
- Total job loss since October 2008 = 570,000
- Job loss in February = 44,000
- Total job loss since December 2007 = 329,000 or -4.0% of payroll
- Total job loss since October 2008 = 174,000
Government continues to add jobs – like it always does – but remains vulnerable to overwhelming job loss at the state and local level
- Jobs added in February = 9,000
- Total jobs added since December 2007 = 203,000 or +0.9% of payroll
- Total jobs added since October 2008 = 33,000
As you can see, some industries are rivaling previous recessions while others are far worse. This is a severe labor market contraction.
Originally published at the News N Economics blog and reproduced here with the author’s permission.