TDC IDEA - An Affiliate of the State Data Center
The official website of The Development Corp.'s
Institute for Development and Economic Analysis
Facts and Figures Relevant to Economic Development in Clinton County, New York
Filling in the hole
by Paul Grasso, January 18, 2010
A recent Bureau of Labor Statistics (BLS) report showed job losses to be moderating in November. With 7.8 million jobs lost since the beginning of the Great Recession in December of 2007, a loss of only 11,000 jobs in November is good news indeed. This news is on top of a positive revision to earlier data, showing that the labor market lost 159,000 fewer jobs in September and October than was previously thought. The "official" unemployment rate in December was 10.0%.
The U-6 rate, which is considered to be a broader measure of labor underutilization in the country, edged up to 17.3%, as some of the long-term unemployed are either sufficiently discouraged to withdraw from the labor force or have accepted part time jobs.
There is other interesting information buried within the page of the "Employment Situation Summary" from the Bureau of Labor Statistics. According to the BLS, there are currently:
- 2.5 million people who are marginally attached to the work force. These individuals are willing and able to work and have either held a job or searched for employment within the last year, but are not actively seeking employment. Workers can be marginally attached for a variety of reasons.
- 929,000 discouraged workers. These workers are willing and able to engage in productive activities, but due to their overwhelming lack of success believe that any effort to find a job will be fruitless so they have stopped seeking employment. In contrast to marginally attached workers, discouraged workers believe search efforts would not be worthwhile.
- 9.2 million "involuntary part-time workers," and 6.1 million "long-term unemployed" individuals who have been looking for a job for a year or longer.
- 40% of the unemployed were without a job 27 weeks or longer.
As of December 2009, there are 15.3 million unemployed people in the United States, up from 7.7 million at the start of the recession. The average person who was unemployed in December had been out of work for 29.1 weeks. By contrast, when the recession began two years earlier, the average unemployed person had been out of work for 16.5 weeks.
In the early months of the recession, Washington focused on supporting laid off workers, through safety-net programs like unemployment benefits, to minimize the effects of joblessness. Now the focus is shifting on the harder task of putting the unemployed back to work.
Paul Krugman, a Nobel Memorial Prize winning economist, Princeton professor and New York Times columnist, wrote recently that the economy needs to add an estimated 127,000 per month just to keep up with population growth. He arrived at this figure using data from the Economic Policy Institute. Kugman states that in "order to achieve more or less full employment, the US economy will need to add around 18 million jobs."
Krugman postulates that the replacement of nearly 8 million jobs lost since December of 2007, when combined with population growth, must add an additional 10.7 million jobs over the next seven years (i.e., 7 years x 12 months x 127,000 jobs per month).
Many economists note that it is difficult enough to replace the 7 to 8 million jobs that were lost over the last two years. They question how the economy will be able to generate the additional jobs that are needed to keep up with population growth. For this reason, many economists predict that unemployment will remain high for the foreseeable future.
Labor Market Information
Unemployment Statistics (NYSDOL Data)
Labor Market Overview (NYSDOL Data)
New York State's seasonally adjusted unemployment rate rose from 8.6 percent in November to 9.0% in December 2009, matching a 26-year high. The number of unemployed state residents increased from 832,200 to 868,600 over the same period.
In December 2009, New York State's seasonally adjusted private sector job count dropped by 3,100 (less than 0.1 percent) to 7,050,700. Since the state went into recession in August 2008, it has lost 263,500 private sector jobs, or about two-thirds of the employment added during the state's 2003-2008 economic expansion.
"In December 2009, New York State's unemployment rate remained well below the nation's rate, while employers in the state cut jobs over the past year at a more modest pace than those in the U.S. Experience suggests that the unemployment rate may continue to increase in the early stages of an economic recovery as some firms are slow to hire new workers and job seekers re-enter the labor force," said Peter A. Neenan, Ph.D., Director of the Division of Research and Statistics.
According the New York State Department of Labor, since December 2008, the number of nonfarm jobs in New York State decreased by 169,800, or 1.9 percent, and the number of private sector jobs decreased by 153,100, or 2.1 percent. Nationally, the number of nonfarm jobs decreased by 3.0 percent and the number of private sector jobs decreased by 3.6 percent between December 2008 and December 2009.
Educational and health services (+44,800) was the only major industry sector to add jobs over the December 2008-December 2009 period. Within this sector, increases were registered in both health care and social assistance (+27,800) and educational services (+17,000).
Professional and business services (-40,300) registered the largest over-the-year drop among declining sectors. Losses in this sector were concentrated in professional, scientific and technical services (-21,100), and in administrative and support services (-20,100). Manufacturing lost 38,700 jobs between December 2008 and December 2009 with most of the loss in durable goods (-29,900), especially fabricated metal product manufacturing (-6,100). Trade, transportation and utilities lost 34,600 jobs over the year with its losses concentrated in the economically-sensitive wholesale and retail trade industry group (-26,200). Job losses in financial services (-30,700) were centered in the securities industry (-18,400). Construction lost 25,400 jobs, with specialty trade contractors experiencing the largest decline within the sector (-16,700). Jobs also decreased over the year in government, information, leisure and hospitality, other services, and natural resources and mining.
Change in Jobs by Sector, December 2008 - December 2009
The two sectors of education and health services remain the bright spot in New York State, demonstrating a growth that has been sustained over the length of this recession. However, in the month to month data, we see not only an increase in the typically robust educational and health services jobs of 9,900, but also increases in trade, transportation and utilities of 22,000, government of 7,600, professional and business services of 7,600, and 1,200 in other services. These gains further demonstrate that there is a renewed willingness to hire some of the workforce lost since December of 2007.