Economic Notes: Labor Market Ends First Half on a Downer
7/02/2009
By Patrick O'Keefe, Director of Economic Research, J.H. Cohn
Employment fell again in June and is now 4.7% below its pre-recession peak. According to the Bureau of Labor Statistics, the only major sectors in which employment rose during June were government, education, and health care.
Private sector employment is down by 6.6 million (-5.7%) since the recession began. While representing less than 18% of all private employment, the goods-producing sectors (manufacturing, mining, and construction) have accounted for almost half (49.6%) of all private sector jobs lost over the past 18 months.
Among the employed are almost nine million individuals who are working part-time for economic reasons (e.g., slack business conditions). Although the number of involuntary part-timers has remained relatively flat for the past four months, it has almost doubled since the outset of the recession in December 2007.
The unemployment rate rose slightly in June, but at 9.5% is at its highest level since August 1993. And the duration of unemployment is at record levels. The median (mid-point) spell of joblessness is 14.9 weeks, but the average jobseeker has been out of work for over 24 weeks – the longest duration since recordkeeping began in 1948.
As a consequence of the labor market’s weakness, some 5.9 million individuals have become so discouraged as to have abandoned their job search. If they were counted as “unemployed” rather than “discouraged,” the rate of unemployment would already exceed 10%.
In sum, even though the pace of job loss slowed by one-third in the second quarter, the economy still lost almost 1.3 million jobs and ended with almost 20 million individuals unable to find work. These data do not suggest that a rebound is imminent.
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