The Employment Numbers – What You Should Know

The US Bureau of Labor Statistics employment numbers are closely watched. If they are up, the economy is recovering. If they are down, look out for a double-dip. But there is more to be learned from them than just what happens to the monthly totals.

The Large US Employment Sectors

Let’s start by looking at the big US employers. Data on average employment in 2007 (before the collapse) are given in Table 1. The private sector employs 5 times more than government. And in the private sector the biggest employers are trade, manufacturing, and health. We hear a lot about the real estate collapse and the consequent decline in construction. But recognize that construction is not that large an employer. In government, localities are by far the largest employers.

Table 1. US Employment by Sector (in thousands)

So what happened to employment during the recession? Table 2 gives annual changes for employment in the private and government sectors from 2006 to the present (through August in 2011). The time phasing of the changes are quite different. 2009 and 2010 were horrific for the private sector: almost 9 million jobs lost in those two years.

Table 2. – Employment Changes, 2006-2011 (in thousands)

The job losses in government only started in 2009, and they have intensified since then. These two sectors are considered in more detail below.

The Private Sector

What happened during the recession and what is the situation now for the major US private sectors. Table 3 tracks employment changes from 2007 through August of this year for these sectors. Several points stand out. More than 1 million jobs were lost in retail, manufacturing, and construction. Job losses in construction were truly chilling. Even today, the construction industry is down almost 2 million jobs, or 25% of its total employment!

Table 3 – Private Sector Employment Changes, 2007-2011 (in thousands)

It is notable that the job losses in construction did not all stem from the real estate downturn. The total job losses in building construction have only been 572,000, or about a quarter of the construction losses. Private health care and education have continued to add jobs through the recession.

Government

Table 4 presents developments in the government sector since before the recession.

Table 4 – Government Employment Changes, 2007-2011 (in thousands)

The Federal government can borrow while most state and local governments’ ability to borrow is normally restricted to capital projects. The results can be seen in Table 4. Employment cutbacks continue at high levels for the lower level governments. From 2009 through today, 253,000 education jobs have been lost at the state/local level.

Back to the Monthly Numbers

 As Table 2 indicated, the private sector added 1.2 million jobs in 2010 while government dismissed 233,000 workers. Table 5 gives the monthly totals for 2011.

 Table 5. – Employment Changes, 2011 (in thousands)

Republicans fear that new taxes will slow growth. But they ignore the on-going job losses resulting from austerity forced on state and local governments.

The content above was saved on the old Morss Global Finance website, just in case anyone was looking for it (with the help of archive.org):
This entry was posted in Global Economics, Global Finance. Bookmark the permalink.