Friday, May 8, 2009

Willy Wonka's chilling job market

This is what the labor market looks like to me:

The April employment report was nothing short of awful. The unemployment rate surged four-tenths of a percent to 8.9%, and the nonfarm payroll was reported to have shed another 539k jobs. In total, the unemployment rate almost doubled and the payroll slashed 5.7 million jobs since the cyclical peak, December 2007.

The chart below illustrates the payroll loss by sector for the big 3 recessions – those that lasted 16 months or more (April marked the 16th month of recession in the current cycle).

  • In the big 3, the current cycle is seeing record job in construction, manufacturing, trade, transportation and utilities, financial activities, professional and business services, leisure and hospitality, and other services.
  • The “last men standing” in this cycle – those industries that added jobs over the cycle – span just three industries mining and logging (<1% of the total payroll), education and health services, and government. Government is a risk, as the bulk of states and local governments are seeing budget shortfalls.
  • May 2009 is the 17th recession month in the current cycle, making it the longest recession since 1933. There is much job loss left in the pipeline; and although labor market is not expected to emulate that of the Great Depression, it does seem steal the spotlight from the 73-75 and 81-82 recessions.
The rate of job loss likely hit its peak, but the job destruction is still very troubling.

Rebecca Wilder


  1. The rowers are still rowing despite the "peak". Interesting word, peak, as it does not mean "stopped" just the top or bottom as the case may be. I can't see a whole lot of optimism for jobs in 2009.

  2. Smack MacDougalMay 8, 2009 at 4:31 PM

    Employment has been dismal for years in the USA, contrary to the false beliefs held by many.

    If you were to go back and look at jobs reports since 2001, you would see the seeds of today.

    Almost all employment growth from 2001 until the recession happened in the Public Sector -- funded directly or indirectly through taxpayers' money.

    Most employment happened in government jobs, medicine (medicare, medicaid-funded, medical insurance as write-off funded) and higher education (student loans subsidy, taxpayers' funded grants).

    In short, the Americans have been living under a phony economy for a long time.

    Once the China Bubble burst (08-08-08), the phony U.S. economy became exposed.

    We're in bad shape in America, unfortunately.

    Americans lack skills for anything but pushing papers and standing about water coolers, gossiping.

    Americans aged 21 to 39 know little except jargon and buzzwords. They can talk a good game at the water cooler, but they lack any wit or skills to make things wanted in marketplaces the world over today.


    So, do we give 20,000,000 amnesty and then put them on the social security payrolls when they retire? How long do they have to work and contribute to SS to receive SS benefits?

    So, if you subtract the number of unemployed Americans from the number of illegal immigrants you get a surplus of U.S. jobs. If these people are deported the number of un-employed and under-employed would have multiple jobs to choose from.


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