Friday, February 6, 2009

Employment Report is Damn Ugly

From the BLS:

Total nonfarm payroll employment fell sharply (-598,000) in January. Since the recession began in December 2007, 3.6 million jobs have been lost, with about half of the decrease occurring in the last 3 months. In January, employment declined in nearly all major industries, while health care and private education added jobs.

Nonfarm payroll employment fell sharply in January (-598,000) and the unemployment rate rose from 7.2 to 7.6 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today.

Manufacturing employment fell by 207,000 in January, the largest 1-month decline since October 1982.

Construction lost 111,000 jobs in January. Employment in the industry has fallen by about 1.0 million since peaking in January 2007.

Retail trade employment fell by 45,000 in January and by 592,000 since a peak in November 2007.

There is nothing good in this report.

Let's look at some charts that start in 2001 to get an idea of what is happening related to the jobs created during the last expansion.

Above is a chart of total goods producing employees. Notice this number never recovered to pre-recession levels. Also note this number has been ticking down since roughly the first quarter of 2006.

The main reason for the lack of growth to pre-recession levels is the drop in manufacturing jobs. Some of this drop is due to the increase in productivity we've seen. But a drop of this magnitude also represents the loss of some jobs that are no related to productivity.

Construction jobs did very well thanks to the housing bubble. But, we're now right back where we started at the beginning of this expansion. In other words, the job losses have completely wiped out all of the gains related to construction employment for this expansion.

Service producing jobs started to take a hit at the beginning of last year. Notice that with the complete loss of all construction jobs created during the last expansion all that is left ar the service jobs created. That's one hell of a loss overall.