Job Losses Related to Post-War Recessions

The January employment report from the Labor Department revealed an unexpected decline in the jobless rate from 10.0 to 9.7 percent, but other parts of the report were less hopeful. The Labor Department revised the number of jobs lost over the past year down by 902,000 in its annual benchmark adjustment to unemployment insurance tax records. Since the recession began in December 2007, employers have shed 8.4 million payroll jobs, a decline of 6.1 percent, which would make this the sharpest decline in employment associated with any recession since the Great Depression. Only the extended jobless recovery that followed the 2001 recession lasted longer. Despite the new benchmark, the labor market still appears to be bottoming out, and the question remains how long it will languish at the bottom. Surging labor productivity, strong temporary hiring and an increase in hours worked suggest that employers may soon begin hiring full-time workers. One theory is that employers slashed jobs so deeply when commercial paper markets froze in September 2008 that they will have to start rehiring those workers sooner than they did after the 2001 recession. Grubb & Ellis expects net payroll job growth totaling 500,000 to 1 million by year-end 2010, which, although a step in the right direction, would be just a down payment on the 8.4 million jobs lost since the recession began.

Source: U.S. Bureau of Labor Statistics, Grubb & Ellis