Friday, February 6, 2009


The Lehmann Letter ©

The Bureau of Labor Statistics’ crafts its employment reports to convey data, not drama. But today’s report does both ( ):

“Nonfarm payroll employment fell sharply in January (-598,000) and the unemployment rate rose from 7.2 to 7.6 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Payroll employment has declined by 3.6 million since the start of the recession in December 2007; about one-half of this decline occurred in the past 3 months. In January, job losseswere large and widespread across nearly all major industry sectors.”

If we continue to lose half-a-million jobs a month – or more – we will soon reach a double-digit unemployment rate.

Job Growth and Losses

(Click on chart to enlarge)

Recessions shaded

The chart illustrates the crisis’s severity. We haven’t seen job losses in excess of 500,000 per month since the 1974 recession. The chart also shows that losses on that scale during earlier recessions were brief – narrow stalactites. The current signs point to hardship of longer duration.

That’s why passage of the stimulus bill is so urgent.

© 2009 Michael B. Lehmann

No comments: