Echo

The U.S. labor market is really bad in most industries; worse in some

Monday, March 9, 2009

According to Forbes layoff tracker, the umber of layoffs since Nov. 1, 2008, at America's 500 largest public companies is 492,677 (3/6/09).

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

Durable goods manufacturing - as bad as it has ever been, perhaps worse

  • 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


Construction - depth only matched by the 73-75 recession

  • 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

Finance is off the charts bad

  • 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.

Rebecca Wilder

5 comments:

Smack MacDougal March 9, 2009 at 3:10 PM  

Rebecca, this is brilliant, thanks.

As all can see, through each successive recession, only those with jobs in the phony industry of government have survived any recession, with the notable exception of 80-81, when shallow job losses happened.

Finance Activities skipped any hits in all recessions except 90-91 and 2007+.

While the slope of the 2007+ curve is steeper than the mild 90-91 recession, by no means is the curve steep for Finance Activities as the curves for Business Professional Services or Real Wealth Industries (Durable goods, Construction) this recession (2007+).

Especially from 73-75, those working in Real Wealth industries (Durable goods, Construction) have been hit hard in each recession.

Job losses were severe (steep slope) and lasted a long time (20 months or more).

The Real Story of the 2007+ Recession

Prior to 2001, job losses in Business Professional Services (BPS) either were shallow (53-54, 57-58, 90-91) or never happened (60-61, 69-70, 73-75,81-82). Only in the last two recessions, have BPS taken hits (2001, 2007+).

What alarms is the steep slope of BPS in this recession, considering the structure of our economy skews heavily to services.

The curve is tending so steep that it's nearly shifted vertical, which means a move to a near infinitely fast pace to NO JOBS in BPS, that is, the eventual destruction of all jobs in Business Professional Services.

Advertising reps, architects, inspection engineers, testers, lawyers -- all shall suffer in the months ahead.

The crash in BPS foretells a bad time ahead for Americans. After all, most jobs, reside in this sector. Without jobs here, who can buy things, who can sell things?

Louise Lewis, author March 10, 2009 at 4:24 PM  

Job loss...Been there. Done that. Yep, still 'there'.

Losing a job is one of those defining moments in life. We can choose to lose our way (our mind), or we can rise to the challenge and follow what our Spirit tells
us to do.

Remember: We are more than a statistic on the news.

I'll share with you what I was told the day I got "set free" (laid off) from my job: "This is a new chapter in your life. WRITE ONE HELL OF A CHAPTER!" And I did just that! Will you?

Need a break from the doom and gloom? Ready to begin your journey today? Then grab your FREE (no strings) book download at: http://www.noexpertsneeded.com

Simply my way of 'giving back'!

take care,
Louise Lewis, author
No Experts Needed: The Meaning of Life According to You!

Flow5 March 11, 2009 at 12:39 PM  

This isn't probably appropos, but maybe this is not an unemployment problem, but more of a latino problem.

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Anonymous March 28, 2009 at 1:04 PM  

This is a great article. One thing that would interest me is a detailed examination of the durable goods economic data leading up to the recession. I suspect that any growth in the two to 5 years prior to the recession were directly or indiectly related to construction and related domestic consumption. Also think there would be a drastic reduction in export related manufacturing over the same period as well as drops in many industries such as textiles, furniture and consumable plastics.

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