Absolute Unemployment Numbers Show Carnage

While the rest of Wall Street digests the latest Department of Labor jobless claims figures (up by 10,000 to 424,000), I wanted to spend some time talking with you about absolute unemployment numbers.  All of the following data comes from the Bureau of Labor Statistics’ report entitled, “Employment loss and the 2007-09 recession: an overview.”

Folks, get you air sickness bags, as there is going to be some turbulence.

From peak employment levels in January 2008 (138 million total people employed), the United States shed 8.8 million jobs by February 2010.  That represents a percentage loss of 6.4%!

Shockingly, and I do mean shockingly, unlike every other economic contraction dating back to World War II, the economy shed more jobs than were created in the preceding expansion!  From August 2003 to January 2008 the economy created 8,174,000 jobs.  But from January 2008 to February 2010 the economy lost all of those jobs and then some by losing 8,750,000 jobs!

On a percentage basis that is a 107.0% loss.  By comparison, there have been 10 recessions since September 1948, and the previous worst loss, in percentage terms was a 52.7% loss for the recession of April 1957 to June 1958.  Does this make sense?  In other words, how many of the jobs that are created while the economy is growing are then lost.  So, in percentage terms the Great Recession exceeded the previous worst job losses by more than double!

You might be thinking to yourself, “yeah, but what about on an absolute basis?”  Well that loss of 8.8 million jobs is 208.3% higher than the previous worst job losses experienced during the July 1981 to December 1982 recession!  So the Great Recession is the overwhelming champion of job annihilation.

So how has the economy’s job engine done since then?  Has it been running at full throttle, or is it sputtering?  In other words, how far out of the hole are we?

As of the beginning of May 2011 the U.S. economy has only created 1.7 million jobs since that stark moment of job loss trough of February 2010.  That represents a recovery of only 19.3%.  That’s another way of saying that 80.7% of people who lost their jobs still have not found new work.  Folks this is a very sad state of affairs.

By point of contrast, profits for the largest U.S. corporations, as measured by the S&P 500, grew:

• 60.8% in 2009
• 83.7% in 2010
• 5.9% in 2011’s first quarter, according to the Department of Commerce

That first quarter 2011 expansion of 5.9% saw an absolute profit level of $1.7 trillion, and represents a whopping $193,182 per unemployed U.S. citizen!  Mind you folks, this is just one quarter’s worth of profits.  Total profits since the trough of the Great Recession are much, much higher than $1.7 trillion.  So there is plenty of money for U.S. businesses to be hiring workers.

No, it certainly isn’t their private capitalist obligation, as profit hungry businesses, to hire the unemployed.  But as a public moral obligation you would expect some sense of responsibility.  Wouldn’t you?  Similarly, at some point you would expect that there would be some alarm on the part of the general public, wouldn’t you?

Jason

[Note: this post has been edited for flow and typos.]