Job Losses Experienced Double Dip in Prior Recessions

Citigroup (C) announced today that they will be cutting more than 50,000 jobs in the “near term.” This is on top of the 23,000 jobs that they have already cut and will leave the company with approximately 300,000 employees globally. Even though non-farm payrolls dropped by more than 200k in September and October, Citigroup’s layoffs and job cuts by other companies will drive non-farm payrolls even lower.

In analyzing non-farm payrolls data during recessions, we see that at the beginning of an official recession, as defined by the National Bureau of Economic Research, non-farm payrolls start to decline rapidly. However after falling between 200k and 300k, job cuts stall and then pick up once again. We saw this trend in the 1981 to 1982 recession, the 1990 to 1991 recession and during the 2001 recession. I betcha it will happen in this recession as well.

The following chart illustrates the double dip trend of non-farm payrolls during the 2001 and recession.

Here are the charts for 1991 and 1981

Comments

[vbierschwale:]

There is one thing that substantially changes the picture.

During the prior recessions, Americans were helping Americans.

This time around with our largest corporations finding ways to avoid having to pay the taxes that are necessary to run our country and also putting more and more Americans out of work by the offshoring of their work dramatically changes the picture.

Yep, I can hear the naysayers that are saying this is not true.

Problem is, you can't tell me right this minute how many people are out of work.

My suspicion is that its close to 20 % which is 40 million Americans.

Multiply this by an average salary of 50,000 and tell me that you can't see why our retailers, manufacturers and raw material producers are going out of business.

Now the difference is, I am proposing that we use our media to get an accurate count of our unemployed so that we can plan our work and work our plan.

You cannot develop a proper strategy without having sound data to base your decisions on.

Virgil
www.KeepAmericaAtWork....

2008 Nov 18 01:25 PM

[adAstra:]

Interesting. I assume that if we looked into the cuts, we would find that the initial single large cut came from the sector that caused the recession. Later, as the economy grew worse and the recession spilled into other sectors, the other sectors began laying off people to create the second peak.

I was actually expecting a chart of the current payroll loss data as a point of comparison. I don't suppose you have that...

2008 Nov 18 08:30 PM