Well, that’s not good. The Department of Labor announced that there are 533,000 fewer US jobs in November than in October, which is the largest one-month drop since December of 1974, when the job numbers dropped by some 602,000.
The BusinessWeek article offers this perspective:
How bad are these numbers? Worse than in the 1990-91 recession, whose worst month saw 306,000 lost jobs, or the 2001 recession, whose worst month was a loss of 325,000 jobs. The U.S. economy lost 431,000 jobs in May 1980, which was the worst month of the back-to-back recessions of 1980-82. If it’s any comfort, though, November’s showing was better than the recession month of December 1974, when the economy lost a staggering 602,000 jobs, according to the Bureau of Labor Statistics.
I don’t think that’s true. We’re not as bad off yet as during the 2001 recession, and we’re on par with the 1990-91 recession. Sure, this is a terrible month, but how bad have the last few months been compared to other similar runs of job losses? What if you look at job losses as a percentage of the total number of jobs? To answer those questions, I downloaded seasonally-adjusted non-farm payroll employment data from the Department of Labor’s Bureau of Labor Statistics, which is where the 533,000 job loss number came from, and did some number crunching. Feel free to check my work as I go.
One other thing, though: statistics are cold comfort to those who have lost their jobs. I’m going to argue that, percentage-wise, this run of job losses isn’t that bad when compared historically. And yet, 533,000 is a lot of people. It’s equivalent to the entire town where I was born losing their jobs 50 times over. It’s everyone who lives in the Huntsville and Decatur, AL area, including me. Don’t lose sight of the people behind the numbers.
Historical Job Losses
What do job gains and losses from 1960 until now look like?
The graph shows that November’s drop is the largest next to December 1974, as well as our continuing slide this year. May 1980 and October 1970 come next in the one-month-loss list. (But September 1983 kicked ass, adding over a million new jobs.) Now let’s look at the top ten greatest monthly losses.
November was bad, but so was September — it comes in at #5 on this top-ten list.
But what happens if you look at job loss as a percentage of the jobs that could be lost? That is, if you take the number of jobs lost in a given month and divide that number by the jobs you started out with in the previous month, does that change things?
The shape of the graph is about the same, but the fluctuations are now larger earlier in time. The US economy has grown tremendously since 1960. The number of jobs went from about 54 million in January 1960 to 136 million in November 2008. Think of it as job inflation. Any single job doesn’t make as much of a difference to the total now as it did in 1960.
Our top ten list changes noticeably.
All of a sudden, November 2008 drops to 9th place, and September 2008 is gone from the list. December 1960 has taken its place.
But these are still all one-month drops, and the data shows a lot of single-month drops that are surrounded by gains. How does 2008 compare to other runs of job losses? Between 1960 and now there have been seven times that we’ve lost jobs for four or more months in a row.
|Aug 1981 – Dec 1982||17||-2,838,000|
|Mar 2001 – May 2002||15||-2,202,000|
|Nov 1974 – Apr 1975||6||-2,164,000|
|Jan 2008 – Nov 2008||11||-1,911,000|
|Jul 1990 – May 1991||11||-1,621,000|
|May 1960 – Feb 1961||10||-1,256,000|
|Apr 1980 – Jul 1980||4||-1,159,000|
The current run of job losses started back in January 2008. We haven’t yet lost as many jobs as we did from November 1974 to April 1975, and those job losses happened in half the time as our current ones. The August 1981 to December 1982 run holds the top spot. Based on this list, we’re barely worse off than the 1990-91 recession, and much better off than the 2001 recession. What about job losses as a percentage of the number of jobs that existed before the losses?
|Aug 1981 – Dec 1982||17||-2,838,000||-3.10%|
|Nov 1974 – Apr 1975||6||-2,164,000||-2.75%|
|May 1960 – Feb 1961||10||-1,256,000||-2.29%|
|Mar 2001 – May 2002||15||-2,202,000||-1.66%|
|Jul 1990 – May 1991||11||-1,621,000||-1.48%|
|Jan 2008 – Nov 2008||11||-1,911,000||-1.38%|
|Apr 1980 – Jul 1980||4||-1,159,000||-1.27%|
Percentage-wise, our current run doesn’t look that bad. The early 1980s recession was harsh, and these numbers bear out how bad it was. The 1974-1975 recession was also bad, again as is shown by the percent of jobs lost. But even the 1990-91 recession was worse.
So, yeah, November’s one-month drop worries me, but it’s not as bad as other historical losses. Of course, the US economy is still headed down. While we’ve experienced worse recessions, given another four or five months of this and we could move into the top spot across the board.
Where I Got My Data
All of my data are from the US Bureau of Labor Statistics, specifically their data page. Under their “Employment, Hours, and Earnings – National” database I searched for “All Employees, Thousands” under the “Total Nonfarm” super sector. All data were seasonally adjusted. You can get a graph like my first one directly from the Bureau of Labor Statistics.