Tuesday, January 26, 2010

Graph of the day 

Total nonfarm employment peaked in 2007 at 137.6 million, fell slightly in 2008 and then dropped precipitously in 2009 to 132 million, for a two-year loss of 5.6 million jobs. In 2009, total employment was approximately equal to its level in 2001, though the labor force had grown substantially in the interim, making the 2000-2009 period America's second "lost decade" (the first being the 1930s during the Great Depression).

The sharp decline in nonfarm employment, which normally increases from year to year along with the labor force, has been bad enough. But when the components of aggregate employment are examined, we discover even worse news.

We find that the loss of employment has occurred entirely in the private sector, where employment fell from 115.4 million in 2007 to 109.5 million in 2009, a decline that took private employment back to its level at the end of the 1990s.

While private employment was collapsing, government payrolls have been increasing, ticking up slightly from 22.2 million in 2007 to 22.5 million in 2009, an increase of roughly 1.7 million above the 2000 level.
Robert Higgs, in this morning's Investor's Business Daily. Worth noting the size of the decline in 2002-03 and how far it went past the last recession. Do we think it will be better this time? Why?

I had thought this was the manufacturing sector story -- I was surprised when I drew the graph above that it extended to all private sector employment.