Historical Perspective on the Jan 2009 US Job Losses

(This is an update to my November post about US job losses. For more information about where I got my data, please see that post.)

The US job market is definitely still sliding. Back in December I crunched some numbers to see how bad the job losses were as a percentage of the total number of jobs. Here’s what it looks like now that we have two more months of bad news.

Historical Job Losses

Here are the job gains and losses since 1960.

Monthly change in the number of jobs as a function of time from 1960 to 2006

We’ve now had three months whose drop is nearly that of the single largest drop in December 1974, as is shown on this table of the top ten greatest monthly losses.

Year Month Difference
1974 Dec -602,000
2009 Jan -598,000
2008 Nov -597,000
2008 Dec -577,000
1980 May -431,000
1970 Oct -430,000
2008 Oct -380,000
1975 Feb -378,000
1974 Nov -368,000
1975 Jan -360,000

September 2008 isn’t on the list after its preliminary numbers were revised. Now October 2008 is on it instead, and November 2008’s non-preliminary numbers are worse than before.

Now let’s look at job loss as a percentage of the jobs that could be lost. That is, 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.

Percent change in number of US jobs from 1960 to Jan 2009

As before, the shape of the graph is about the same, but the fluctuations are now larger earlier in time. Here’s the top ten worst months by percentage of jobs lost.

Year Month Difference % Diff
1974 Dec -602,000 -0.77%
1960 May -340,000 -0.62%
1970 Oct -430,000 -0.61%
1975 Feb -378,000 -0.49%
1980 May -431,000 -0.47%
1974 Nov -368,000 -0.47%
1975 Jan -360,000 -0.46%
2009 Jan -598,000 -0.44%
2008 Nov -597,000 -0.44%
2008 Dec -577,000 -0.43%

The bottom of our list is filling up with recent months.

These are still all one-month drops, and the data shows a lot of single-month drops that are surrounded by gains. How does 2008-2009 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.

Period Months Difference
Jan 2008 – Jan 2009 13 -3,498,000
Aug 1981 – Dec 1982 17 -2,838,000
Mar 2001 – May 2002 15 -2,202,000
Nov 1974 – Apr 1975 6 -2,164,000
Jul 1990 – May 1991 11 -1,621,000
May 1960 – Feb 1961 10 -1,256,000
Apr 1980 – Jul 1980 4 -1,159,000

What a difference two months makes. Through November, we hadn’t lost as many jobs since January 2008 as we had from November 1974 to April 1975. Now we’ve lost far more than that. On sheer number of jobs alone, we’re in our worst run since 1960. What about job losses as a percentage of the number of jobs that existed before the losses?

Period Months Difference % Diff
Aug 1981 – Dec 1982 17 -2,838,000 -3.10%
Nov 1974 – Apr 1975 6 -2,164,000 -2.75%
Jan 2008 – Jan 2009 13 -3,498,000 -2.53%
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%
Apr 1980 – Jul 1980 4 -1,159,000 -1.27%

I’d still rate the 1974-1975 recession worse, based on this list and the fact that the job losses there were sustained over a mere 6 months. But the situation’s bad, and not getting any better. Two months ago I said, “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.” It may not take four months at the rate we’re going.

10 thoughts on “Historical Perspective on the Jan 2009 US Job Losses

  1. To the writer,
    I am an aspiring journalist and I really enjoyed reading your work. I’m a college student and your writing style really inspired me (:

  2. You know what I do for a living Stephen…and I am seeing this trend first hand in all of the companies that I deal with. The cutbacks are severe and they are getting worse. Even some of the companies that I though were rock solid secure are now beginning to show signs of cracks and belt-tighetning.

    Some of the people that I thought were assured of their positions now find themselves out of the game…desperately trying to find a way back in.

    Its very very grim…and I fear we have not seen nearly the worst of it yet…especially in the sector in which I work.

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