Job Losses & Unemployment
Kurt Brouwer August 7th, 2009
The Bureau of Labor Statistics reported another big job loss month for July, but it was not as bad as forecast. In addition, the unemployment rate fell slightly from 9.5% to 9.4%. Obviously, with job losses continuing the decline in the unemployment rate is more of a statistical issue than a practical one.
The jobs picture is still grim, but there seems to be a slight easing and a leveling out of the downward trajectory as this chart indicates:
Source: Calculated Risk
As you can see, this chart covers all recessions since World War II ended in 1945. The worst period for job losses was 1948 as the economy faltered once all the millions of military men and women mustered out. However, that downturn ended quickly.
The red line covers this current recession and it is still heading south, but not so steeply as it did before. Unfortunately, I do not think it will turn up sharply as did the blue line for 1948.
The BLS release pointed out that labor force participation decreased in July, so the reduction in the unemployment rate is not really meaningful. Other factors such as involuntary part-time work and hours worked did not change much [emphasis added below]:
The Employment Situation Summary (Bureau of Labor Statistics, July 2009)
Nonfarm payroll employment continued to decline in July (-247,000),
and the unemployment rate was little changed at 9.4 percent, the U.S.
Bureau of Labor Statistics reported today. The average monthly job
loss for May through July (-331,000) was about half the average
decline for November through April (-645,000). In July, job losses
continued in many of the major industry sectors.
Household Survey Data
In July, the number of unemployed persons was 14.5 million. The
unemployment rate was 9.4 percent, little changed for the second
consecutive month. (See table A-1.)
Among the major worker groups, unemployment rates for adult men (9.8
percent), adult women (7.5 percent), teenagers (23.8 percent), whites
(8.6 percent), blacks (14.5 percent), and Hispanics (12.3 percent)
were little changed in July. The unemployment rate for Asians was 8.3
percent, not seasonally adjusted. (See tables A-1, A-2, and A-3.)
The number of long-term unemployed (those jobless for 27 weeks or more)
rose by 584,000 over the month to 5.0 million. In July, 1 in 3 unemploy-
ed persons were jobless for 27 weeks or more. (See table A-9.)
The civilian labor force participation rate declined by 0.2 percentage
point in July to 65.5 percent. The employment-population ratio, at 59.4
percent, was little changed over the month but has declined by 3.3 per-
centage points since the recession began in December 2007. (See
table A-1.)
The number of persons working part time for economic reasons (sometimes
referred to as involuntary part-time workers) was little changed in July
at 8.8 million. The number of such workers rose sharply in the fall and
winter but has been little changed for 4 consecutive months.
(See table A-5.)
As economic activity picks up in the coming months, we will probably first see an increase in hours worked and a decrease in those who can only find part-time work. Only then will we begin to see a meaningful increase in the number of jobs
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I have wondered and waited for all of the reporters and economic think tanks to put this out and no one has.. so.. Why are we not pulling together and going back to the BUY American? If the trickle down effect has put so many of us out of work and brought so many companies to thier knees cant the trickup effect also work ?
For months now if it does not say Made In USA I do not buy it, that includes canned fruit, yes you heard me right the canned fruit you buy in the grocery is Not from our farmers, not a Walmart bash but I don’t shop there much anymore because it is so hard to find USA products, I have learned if I cant find it USA made I don’t need it for the most part there are somethings that I have to have like car parts, I request USA and have to pick from China or Mexico and I drive an american made car ! I would like american made parts !
If we all stick to this for even 6 months It has to bring back supply and demand which means more Americans will return to work pay taxes and start to bring the huge spending under control, If we bring less into our country, then we will have to produce it, I fear for my kids, we can’t afford collage now, most of our 401 is gone and there aren’t any jobs.
There should be an internet site that american companies can sign up at with a product list and who sells thier products so we can easily find them and buy more American Goods
Actually, there has been tons of material out on the ‘Buy American’ concept you raise. Here are two links from my posts:
Are We Igniting a Trade War?
China Counterattacks with Buy China Policy
It’s great that you make personal decisions on where something is made. The problem comes if Americans try to legislate such a policy. First, most products such as cars, computers and refrigerators have significant foreign components. Also, the Great Depression was significantly worsened by the Smoot Hawley Tariff Act of 1930, their version of forcing people to buy American.
Kurt,
I think we are on the verge of setting another record for the postwar period. The recession may have ended in output terms in June (we’ll see) but job losses will likely continue for at least a few more months. (Nice chart!)