Tuesday, May 19, 2009

Job creation collapse 

Third quarter 2008 data for gross job gains and gross job losses is out this morning. The only sector that added jobs in Q3 was health and education (which is a strong sector up here in St. Cloud as well.) What is telling in the data for Minnesota (see Tables 5 and 6 infra.) is that the rate of gross job creation collapsed in 2008 from 6.5% of the workforce in September 2007 to 5.7% in September 2008. In the 2001 recession, the rate of gross job losses increased by much more (from 7.3% in 2000Q4 to 8.1% in 2001Q3; so far we've gone from 6.5% in 2007Q4 to 6.9% in 2008Q3.) The rate of gross job losses is relatively constant over the period.

Firms are not hiring more; could it be their expectations about future tax liabilities? We don't have data before 1992, so it's hard to do more than wonder.