Thursday, February 10, 2011

Jobless Recoveries, Redux

Over the last three days, I've normalized the employment numbers for the last three jobless recoveries to compare and contrast the performance of the employment numbers. Here are the links to the posts; part 1, part 2 and part 3. All the data compared points 20 months into the recovery.

Here are the summary points.

By 20 months, the 1990s recovery was in full on growth mode. The unemployment rate was dropping, and initial unemployment claims were decreasing, after spiking the first 10 months of the recovery. Both the private sector the the government were creating jobs. In the private sector, service sector growth was strong, while manufacturing employment -- after dropping for the first 10 or so months -- was rebounding.

In contrast, the early 2000s recovery was languishing. After 20 months of recovery, the unemployment rate had increased and initial unemployment claims were still elevated. Total employees had decreased, with the decrease coming entirely in the private sector. While the service sector was creating some jobs, the manufacturing sector was still bleeding jobs.

Despite having higher absolute levels, the relative performance of both initial unemployment claims and the unemployment rate for the current recovery are in fact the best of the three recoveries. Overall job growth has increased slightly; while government jobs spiked due to the census hiring, their totals after 20 months of recovery are in fact noticeably lower than the previous two recoveries. Private sector employment is responsible for all the job gains, with both the service sector and manufacturing contributing to overall growth.

It's a misnomer to call the early 90s recovery jobless after 20 months; that recovery was seeing good growth across a variety of sectors by this time.

By 20 months, the 2000s recovery was bleeding jobs, primarily in the manufacturing sector. It was seeing some job growth in the service sector, but not really a meaningful amount.

The current recovery is seeing job growth in both service and manufacturing; the central problem is degree; considering the massive bleeding that occurred in 2008 far brisker job creation is needed going forward.