Economic Notes: Should Have Been a Doctor
4/03/2009
Perhaps the only thing the recession has failed to slow is the aging of the Baby Boomers. So, those who wanted job security should have become doctors as healthcare was only major sector of the U.S. economy to gain jobs in March.
Otherwise, employment declined nationally for the 15th consecutive month (chart 1), according to the Bureau of Labor Statistics. The m/m drop of 663,000 jobs brought total losses to 5.1 million (-3.7%) since the recession began in December 2007.
Over the year, employment in the goods-producing sectors (manufacturing and construction) fell by 10.7%. Service sector jobs are down a more modest 2.9% y/y, with increases in health and education employment (+2.3%) offsetting declines elsewhere, including a 27.1% drop in temporary help services.
Among the employed were over nine million (6.4%) working part time for economic reasons (i.e., involuntarily). This is 83% more than in March 2008.
The unemployment rate reached 8.5% (chart 2), its highest level since November 1983. Today’s job seeker is unemployed for an average of 20 weeks (vs. 16 weeks a year ago).
Despite tentative signs that the economy is no longer in free-fall, but contracting at a slower rate, look for the weakness in the labor market to persist throughout 2009. In the face of weak demand and weaker balance sheets, employers still need to rein in their payroll costs.
Technical aside: while the absolute number of jobseekers, 13.2 million, stands at the highest level since contemporary recordkeeping began in 1948, the rate of unemployment remains below the post-war high of 10.8%, recorded at the end of 1982. Since the U.S. labor force grew by 38.7% in the intervening period, the rate of unemployment is lower – but that does not diminish the current economic loss and human toll.
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For more information, contact Patrick O’Keefe, director of economic research at J.H. Cohn, at pokeefe@jhcohn.com or 973-364-7724.