This is what I both love and hate about economics. Yesterday, business orders showed the economy was getting worse. Today, it looks like it is getting better. Why? The September employment report shows there are 6 million fewer jobs than last year.
"This is good?" you ask, incredulously. Well, yes, because last month the economy was down 6.2 million jobs. These year-over-year stats show the trend is improving. In the 2001 recession, the economy did not regain health until this number trended up. Although that recession only lasted 8 months, it led to 29 months of job losses. (See Google Spreadsheet Employment)
Two caveats, however:
- Job losses will continue for probably another year. More people will get laid off, although not as many as the month before.
- The economy still runs a risk of a W-shaped recession, for reasons outlined here.
Manufacturing, a leading indicator, continues to decline. The economy now has 1.638 million fewer manufacturing jobs than the year before, continuing a two-year decline. However, it too is a little better than last month.
Manufacturing is a leading indicator because it produces the big-ticket items consumers put off buying in a recession. Once the economy starts to improve, these orders are the first to come back. In the last recession, manufacturing jobs started to improve before the overall job market. (See Google Spreadsheet Manufacturing Jobs)
For a history of employment reports since March 2007, read Employment Statistics History.
What This Means for You
Only two sectors added jobs in August: Healthcare and education. If you are considering a change, now is a good time to get trained for health care. If you have been laid off, then these articles will help you get a new job, so that you won't be a statistic in next month's unemployment report.
Articles from Alison Doyle, About.com Guide to Job Searching
- How Is Unemployment Defined?
- What Is Being Done to Control Unemployment?
- How Can I Protect Myself from Unemployment?
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