04 September 2009

Employment Picture Still Bad

While stock prices are on their way up, and real estate prices appear to be at or even just past their bottom in many places, employment recoveries lag economic recoveries after recessions. Yet, employment is the most relevant economic fact for the vast majority people.

The percentage of the population employed at all is down about five percentagte points from its pre-tech bust peak, and about four percentage points from the levels it was at before the financial crisis (the lowest levels since about 1984, but higher than employer per population rates before the workforce opened up to women in the decade leading up to that point).

The number of people working part-time because they can't get full time work is up by about 5 million people (to about 9 million people) from pre-financial crisis levels, an increase of about five percent of the work force (relative to the U.S. population this is about the same as in the early 1980s).

The average weekly hours of production workers has fallen to 33 hours a week, a near record low, although this has been declining steadily from almost 39 hours a week in 1965. This may be related to the rise in the size of the overall workforce and the long term decline of the U.S. industrial sector.

The U.S. economy lost 216,000 jobs in August, and the unemployment rate reached 9.7%. "The economy has lost almost 5.83 million jobs over the last year, and 6.93 million jobs during the 20 consecutive months of job losses." The unemployment rate is at a 26 year high. "[T]he current recession is now the 2nd worst recession since WWII in percentage terms (and the 1948 recession recovered very quickly) - and also in terms of the unemployment rate (only early '80s recession was worse)." If the economy continues to shed jobs for another two or three months at anything like the current rate, it will produce the biggest percentage loss of jobs since the Great Depression. Unemployment's post-Great Depression peak was at just under 11% in late 1982, an increase in the unemployment rate of a little more than one percentage point would bring us to that point.

Long term unemployment (i.e. more than six months) is at a record high.

According to NPR this morning, many pundits don't expect the employment situation to turn around until sometime in 2010. The employment situation is expected to get worse before it gets better.

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