With all due respect to Lou Adler, there’s not much evidence in today’s labor report that there’s any recovery in sight. Besides confirming economists’ expectations that about 524,000 jobs were lost in December, the Bureau of Labor Statistics revised its November jobs report to say the U.S. lost 51,000 more jobs than the 533,000 it initially reported.
The December numbers pushed the nation’s unemployment rate to 7.2 percent, a rate that jumps to 13.5 percent when you include the underemployed — those involuntarily working part time or at temporary jobs or are otherwise marginally attached to the workforce.
As many news organizations pointed out, the 2.6 million jobs lost last year was the largest jobs loss since the end of World War II, when 2.75 million jobs disappeared. The pain would have been worse in 1945, however, since the nation’s population then was 132.5 million. Today the population is 301.6 million with 135.5 million non-farm workers.
A more telling statistic is the rate of job loss. More than 1.9 million jobs were lost in the last four months alone. In the last eight years 3 million jobs were created, compared to the 22.8 million in the eight years previous.
Bloomberg News quoted Michael Darda, chief economist at MKM Partners LP in Greenwich, Connecticut, saying, “This was the most rapid deterioration in the labor market over a six-month period since 1975.” “Policymakers will go full throttle” until “the labor market starts to turn.”
When that turn will come is not at all clear. On the heels of today’s employment report, the Society for Human Resource Management released a forecast projecting a 23.3 percent drop in manufacturing sector hiring and a 19.5 percent drop in service-sector hiring for January compared to last year.
Three weeks ago Challenger, Gray, & Christmas issued a forecast of 1 million jobs to be cut in 2009, which might be considered an improvement over 2008. However, the outplacement firm said this week that there were 166,000 layoff announcements in December, with most of the job losses to occur in January.
Every major indicator watched by the financial markets and economists is down. Last month, The Conference Board’s Employment Trends Index dropped to 102.9, declining 13 percent in a year. The ETI is a composite of eight labor market indicators that filters out erratic movement in one or another of the independent indicators to better show the economic trends.
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In addition, The Conference Board’s Help-Wanted Online report for December, released Wednesday, showed a decline of 507,000 posted jobs during the month. The report observed, “The December loss brought the monthly total of online advertised vacancies below 4 million for the first time since July 2006, two and one-half years ago. In 2008, there were on average 170,000 fewer ads each month than in 2007.”
“The sharp December drop in online advertised vacancies is another indication that the economy has not reached bottom,” said Gad Levanon, senior economist at The Conference Board. “The widespread nature of the decline in employers’ demand for workers — both across geographies and across occupations — does not bode well for an employment upturn in the first half of 2009.”
For recruiters, at least those who still have a job, the layoffs, bankruptcies, and closures means there is a larger supply of high-quality workers available.
As the SHRM press release notes:
“The good news: the few HR professionals actively recruiting report little-to-no difficulty in filling jobs with top talent. The reason: the historic number of people unemployed and available for work.”