The January employment report shows there are 4 million fewer jobs than January of last year. Color this fact a dark gray. But, it is a lighter shade of gray than in July 2009, when there were 6.8 million fewer jobs year-over-year. To see the trend, review my calculations on Jobs Google Spreadsheet.
There were 52,000 temporary jobs added in January, 9,000 of which were for the Census. In the expansionary phase of a business cycle, employers add temporary workers before hiring full-time works. I'm not sure we are in the expansionary phase yet, but we are coming out of the trough. Unfortunately, this is the baddest trough this country has seen since the Great Depression. The color of the light at the end of the tunnel? You guessed it - gray.
The unemployment rate dropped a smidge to 9.7%. This would have to continue for another eight months to be as bad as the 1982 recession, when unemployment was 10% or higher for 10 months. For a history of unemployment reports since March 2007, see Unemployment Statistics History.
The trend in manufacturing jobs, a leading indicator, is also improving . The economy now has 989,000 fewer manufacturing jobs than the year before. This is better than June, when manufacturing was down 1.6 million jobs .
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. For the data, see Google Spreadsheet Manufacturing Jobs
(Source: BLS, Employment Situation Summary)
What This Means for You
Three sectors added jobs in January: business and professional services, healthcare, and education. This was due to an increase in temporary workers, reflecting a shift towards the Freelance Economy.
Expect job losses to continue until July 2011, based on the experience of the 2001 recession, which lasted 8 months, and had 29 months of job losses. To find out more, see When Will Job Opportunities Improve? For a history of employment reports since March 2007, read Employment Statistics History.
Continued heavy job losses means the economy still runs a risk of a W-shaped recession, for reasons outlined here.
Articles from Alison Doyle, About.com Guide to Job Searching
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Comments
Well Kimberly, US Seems back as we see Factories,Manufacturing & 9.7% Unemployment fighting back but PayRoll Need more to fight for better Economy and to show Green Figures in Labour Department.
But as you said unemployment rate would have to continue for another eight months,It seems really hard for 2010,
Hi Asif,
I think 2010 will be difficult (Dow below 10,000 now, probably will go lower) but the year will end on the upside – as I said earlier, a W-shaped recession.
Don’t panic!
Kimberly