Signs of healing in the labor market, though unemployment remains in double digits

[ProSense]

Signs of healing in the labor market, though unemployment remains in double digits

Heidi Shierholz December 4, 2009

This morning’s Bureau of Labor Statistics report on the employment situation showed a dramatic moderating of job loss in November—payroll jobs declined by 11,000, the smallest loss since the recession started in December 2007. There was also a positive revision to earlier data, showing that the labor market lost 159,000 fewer jobs in September and October than was previously thought. Unemployment edged down to 10.0% in November, though that was likely a reflection of the volatility of the household survey and something of a correction to the uncharacteristically large jump up in unemployment last month.

Other good news in the payroll survey was that the average workweek increased from 33 hours to 33.2 hours, a 0.6% increase and a positive signal—an increase in hours is typically a precursor to employment gains, as employers who have cut hours are likely to restore them for their existing employees before hiring new ones. Much of the improvement in the labor market can be attributed to the American Recovery and Reinvestment Act (ARRA), which has likely created or saved between 170,000 and 235,000 jobs per month starting in the second quarter of this year. Without the ARRA, November losses would have likely been over 200,000, and instead of losing 2.7 million jobs since its passage in February, we would likely have lost between 4.0 and 4.5 million.

Since the start of the recession in December 2007, an estimated 8.0 million jobs have been lost. This number includes both the 7.2 million jobs lost in the payroll data as currently published and the preliminary annual benchmark revision (released on October 2nd), which showed an additional 824,000 jobs lost from April 2008 to March 2009. But even this number understates the magnitude of the hole in the labor market by failing to take into account the fact that the population is always growing. To keep up with population growth, the economy needs to add approximately 127,000 jobs every month, which translates into 2.9 million jobs over the 23 months since the start of the recession. This means the labor market is currently 10.9 million jobs below the level needed to restore the pre-recession employment rate. In order to fully fill in the gap in the labor market in the next two years (by November 2011), employment would have to increase by an average of 581,000 jobs every month between now and then. This kind of sustained employment growth hasn’t been seen in nearly 60 years (1950-51), when gross domestic product grew at a 9.2% annual rate.

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A good sign in the payroll data the addition of 52,400 jobs in the temporary help services industry, the fourth straight month of gains in that sector and the largest in 10 years. The growth in temporary help services is very good news, as this sector tends to lead broader recoveries.

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[Clio the Leo]

1. I've been watching it decline since it was 700,000....

..... 11,000 almost boggles the mind.

[ShortnFiery]

2. Yeah, everything's fine. Go shopping?

:sarcasm:

[ProSense]

3. Dumb comment.

No one said everything is fine.

[ShortnFiery]

4. No, it's extrapolation. Those who are still UNEMPLOYED could care less about such

nebulous STATS. Where will all these TO BE CREATED JOBS come from?

[ProSense]

5. No, it's dumb.

The people who are unemployed when the economy begins adding more jobs than it loses will not care either. It's completely bogus use that argument to as a criticism.





edited extra word.