By now everyone has heard the numbers - ugly as they are.
In this diary I want to look inside the numbers to see if there are any important trends or tidbits of information.
In addition to looking at month to month changes I like to look at 12 month changes (especially as month to month numbers are so subject to revision) so the numbers presented below compare March 2009 with March 2008.
5 million jobs - gone
In the last 12 months almost 5 million jobs have disappeared. But, the job losses are not equally spread throughout the economy. Instead they have been concentrated in certain industries. Of the almost 5 million jobs lost, fully 46% were lost in the goods producing sector (think construction, manufacturing etc.) What is devastating is that the goods producing sector only accounts for 15% of employment. Think about it. Almost half the jobs lost were from only 15% of the economy.
Overall: - 4.814 million jobs
Goods producing (private sector): -2.228 million jobs
Service sector (Private sector): - 2.669 million jobs
Government: + .085 million jobs
Government, which accounts for 17% of the economy has actually increased employment in the last 12 months. The private service sector, which accounts for about 68% of employment lost 2.7 million jobs (or 56% of the total). Clearly the goods producing part of the economy has been talking the biggest share of the hit so far.
Worst Hit:
Here is a breakdown from some of the goods producing industries over the last 12 months (jobs lost, %of March 2008 employment).
Construction: - 934,000 (-13.25%)
Manufacturing (total): - 1,215,000 (- 9.0%)
Textiles/mills: - 54,000 (- 17%)
Motor vehicles and Parts: - 218,000 (-23.6%)
The losses in both textiles (-17%) and autos (-23%) are astounding for just a 12 month period. Similarly the drop in overall manufacturing employment of 9% in just 12 months is nothing short of devastating.
The service sector:
In relative terms the service sector has, so far at least, been less severely impacted. It is hard to see how that can continue for long.
Considering the carnage over the last year in real estate and finance, the job losses do not look that bad. Of course people may not be taking home as much money as in the past, especially in real estate.
Finance and insurance: (-348,000 or - 5.7%)
Real estate: (-70,000 or -4.8%)
In "Private sector health and education"there has actually been an increase in employment (+ 436,000 or + 2.3%), with increases spread across doctors' offices, hospitals and nursing homes. I guess people still get sick and need to be cared for, recession or no recession...can they pay? Well that's another question.
The "leisure and hospitality" sector has been relatively lightly impacted with job losses of 343,000 or 2.6% of March 2008 employment. You would think that restaurants would be really hurting but it was "Accommodation" that was the hardest hit, with a loss of 8.6% of jobs. This lines up with reports of decreased hotel occupancy rates and price discounting on rooms. An interesting side note is that the number of people working in "Food services and drinking places" now outnumbers the number of "production workers" in the country! Now that is NOT a good sign - maybe we will have to start relabeling kitchen staff as manufacturers.
In terms of retail, while the numbers are bad, the bad news is concentrated as well. Retail lost 609,000 jobs (-4.0%), but 160,000 of those losses were from auto dealers (who only represent 7% of retail employment). General merchandise stores (about 20% of retail employment, actually had a slight increase in jobs (Wal-Mart?).
Government:
So far at least the recession has pretty much passed government workers by. Employment is up a bit at all levels of government, except at the Post Office which has been shedding workers. In fact government workers as a percentage of the employed work force have risen from 16.67% in March 2008 to 17.4% last month.
Comments:
It remains to be seen how much longer government employment, especially at the state and local level, can continue to remain relatively unaffected, especially as tax revenues dry up. I would expect to start seeing lower numbers here in the next few months.
Looking forward I also expect to see more future job losses coming from the service sector. It is a huge part of the economy and it looks like some sectors have not reduced staffing by much as of yet. As the recession deepens (and it will deepen) they are going to be forced to adjust staffing levels even further.
Manufacturing - just one word says it all - UGLY.
Overall an ugly jobs report, and one that likely understates the actual situation. Recently just about every jobs reports contains revision showing that the previously reported numbers were actually worse than what was originally reported. Expect to see negative revisions to this month as well.