Putting Job Losses Into Perspective

Rutgers did a fantastic job of putting the current unemployment plight into perspective in their September report. During the past 20 months between December 2007 and August 2009 the US economy has lost 7,047,000 private sector jobs. This 7M job deficit under reports the current slump as the US economy adds 1.3M jobs due to growth in the labor force. By the end of 2009, the total labor deficit will be about 10,000,000 jobs.

To put this into perspective, the 1991-2001 expansion (which was quite robust) created 2.15M private sector jobs per year. If on January 1, 2010 the United States created a robust 2.15M jobs per year it would take until August 2017 until we were back at 5% unemployment. To further put how optimistic a 2.15M job growth assumption is: during the recovery between November 2001 and December 2007 the US economy created an anemic 1 million jobs per year compared to 2.4M per year between 1982 and 1990 and 2.2M between 1991 and 2001.

Higher Losses and Lower Growth as Time Marches On

Comments

[conceptwizard:]

David Rosenberg writes:

The number of people not on temporary layoff surged 220,000 in August and the level continues to reach new highs, now at 8.1 million. This accounts for 53.9% of the unemployed — again a record high — and this is a proxy for permanent job loss, in other words, these jobs are not coming back. Against that backdrop, the number of people who have been looking for a job for at least six months with no success rose a further half-percent in August, to stand at 5 million — the long-term unemployed now represent a record 33% of the total pool of joblessness.

JPMorgan Chase’s Chief Economist Bruce Kasman told Bloomberg:

We've had a permanent destruction of hundreds of thousands of jobs in industries from housing to finance.

America cannot recover with no focus on long term employment.

Oct 06 02:52 PM

[Karen Consumer:]

I'm on week 15 of being unemployed, and I can't even get an interview for a $12 hour job (I was making $20.27). Supposedly there are jobs out there (I've already submitted 176 resumes/applications) because I see the ads, but evidently there are more of me then there are of jobs. I live in the Dallas/Ft. Worth area, we're supposedly not so bad hit by the recession as everyone else. If this is not so bad, I'd hate to be in a bad metro area.

Oct 06 05:11 PM

[Tony101:]

Still,

Most people I know continue to spend as they think the economy will recover next year.

Oct 06 05:23 PM

[SivBum:]

More than 80% of the workers are gamefully employed and doing the spending for the 20% underemployed. No end of the world as advertised by several Nobel Econ winners during this past Winter.

Oct 07 11:28 AM