This is one nasty looking chart:

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The current contraction is far far worse than the prior downturns: 3.6 million — and counting — job losses as of yesterday is worse than the 2.7 million jobs lost in the 2001 recession, and far worse than the 1.6 million job losses in the 1990-1991 recession.

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Hat tip Brian B

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via Time Magazine

Category: Employment

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

40 Responses to “Job Losses: Comparing Recessions”

  1. globaleyes says:

    HERE’S MY IDEA relating to current job losses: while Congress is debating a stimulus program they should add provisions creating O.P.I.C.s or One-Person Internet Companies. This idea is inexpensive and instantly creates jobs. Recently released Wall Streeters would be delighted and individuality would reign !

  2. Blissex says:

    Well, to a REAL AMERICAN that’s only good news: Real America businesses are getting rid of a lot of losers, ballast holding it back, cattle easily replaced with asian or latin american cattle who is harder working and far less expensive.

    What Real America also needs is to increase the rewards for the productive, progressive winners, people like investment bankers, stockbrokers, real estate agents, all those heroes of the long Bush boom that has made a lot of money for Real Americans like Mozilo, Cayne, Fuld, … Fortunately the TARP and the new stimulus funds have been providing the cashflow to pay out the bonuses to which the best and brightest are so rightfully entitled.

    :-)

  3. globaleyes says:

    O.P.I.C.s = One-Person Internet Companies and represent the newest way to organize economic activity.

    Wanna become a HUMAN GROWTH STOCK ? Start an O.P.I.C.

    After that comes – you guessed it – a stock market made of individuals instead of corporations. Imagine buying 200 shares of John Doe instead of IBM. How’s this: NO IPOs – the money goes directly to the O.P.I.C. Companies become consultants and vendors to people and not the other way around (wink).

  4. Gonzalo Lira says:

    Check out the slope of the unemployment curve: We’ve only just gotten started on this mother.

    A hundred bucks says U-3 unemplyoment gets up to 15%, U-6 up to 30%—all by December 31, 2009. Sounds crazy? Sure. But if we’re losing ±550,000 jobs a month with absolutely no clue as to how to stop the slide, then it’s only a matter of time.

    Comments?

    ~~~

    BR: My U3 / U6 numbers are 9-10%, and 18-20%.

  5. mrwhatever says:

    the job losses are impressive but they should be put in perspective – the size of the economy now
    is bigger than that in 1990 and 2001

    ~~~

    BR: How about getting the actual data for total employed in each period? That will put it into perspective!

  6. rktbrkr says:

    That is a nasty looking chart. Bill Gross is now referring to the economy as a “mini depression”, another 3 months like this and he can ditch the “mini” part.

    I wonder if Europe and asia were in coincident declines in 1990 and 2001 recessions?

  7. Steve Barry says:

    Mrwhatever is right…we should normalize by GDP…that should make it look less drastic. Of course, we should also have a version that is ex-birth/death model…that might make it much more drastic. Then we should compare also to the GD in the 1930′s.

  8. Steve Barry says:

    @rktbrkr:

    Nobody wants to call it a real depression, so they say things like “mini” or “not as bad” as a depression. They don’t want to take a very bad recession and scare people into a real depression. Of course, we may actually have something worse than the great depression, as this time it is more global, the debt mountain is unimaginable compared to 1929 and gov’t seems hellbent on interfering.

  9. rktbrkr says:

    There a saying that “Patriotism is the last refuge of a scoundrel”. Have you seen Maria’s softball interview of Ken Lewis claiming he overpaid for ML for the good of the country? This claim is in the “interview” (more like a public service announcement) being played and replayed 2 days after he bought $1M of BAC stock. The timing of the stock purchase and interview was remarkably fortunate for Lewis who snagged a 250K gain in 2 days

  10. danm says:

    GDP is full of bubble revenue.

  11. John from Concord says:

    I’d like to see a chart like this that shows a) job losses expressed as a percentage of total employment and b) includes the 1981-1982 period. I have a hunch that our current situation would look less bad in that context, but either way I think it would be very helpful.

  12. danm says:

    I have a hunch that our current situation would look less bad in that context, but either way I think it would be very helpful
    ————–
    Maybe at the current time but just look at the facts:

    1. Books still full of crap (arguing about mark-to-market… the reason is because they know there is more to come
    2. New batch of defaults coming on:
    - Alt-A
    - CRE
    - Credit cards
    + Companies from all sectors that go bankrupt because of the economic environement.

    Sorry. We are far from having solved this. Our leaders are looking in the rear-view mirror. All this TARP stuff has been targeting defaults of the last year. These new defaults will require new TARPs.

    We’re not out of the woods yet!

  13. Gonzalo Lira says:

    I insist: The question is, When and at what level will unemployment peak, if there is clearly no clue (let alone consensus) on how to stop the slide we’re in.

    So I repeat: A hundred says U-3 at 15% by year’s end, U-6 at 30%.

    (I’m not worried: By year’s end, $100 will already be worth a lot less than it is now.)

    (BTW, the “Patriotism is the last refuge of the scoundrel” quote is from Samuel Johnson.)

  14. dsimard says:

    I think a better way to adjust would be by the size of the population. That relates number of jobs with number of people which makes more sense than size of the economy. The chart won’t look as bad if you do that. Of course it might keep getting worse, but that’s another matter.

  15. Marcus Aurelius says:

    Best definition of patriotism I’ve come across:

    Patriotism is insisting a place is better than all others, because that place is where you’re from.

  16. E says:

    Gonzalo, if unemployment rates are as high as you predict, then $100 will be worth a lot more than it is now.

  17. carmen101 says:

    Check out the chart at Calculated Risk. It shows the y-o-y percentage change rate in employment since 1960. It looks almost as bad as this one, but not the worst yet. Almost there.

    http://3.bp.blogspot.com/_pMscxxELHEg/SYw9f6KVebI/AAAAAAAAEfI/mNvJABF6i-I/s1600-h/EmploymentMeasuresJan09.jpg

  18. km4 says:

    If its this bad i.e. deep cuts in Silicon Valley then rest of country is really hurting

    http://gigaom.com/2009/02/06/job-losses-the-silicon-valley-perspective/

    A larger portion of the workforce (like it or not) is going to look more like freelancers or consultants, working on demand. That change means the government will need to step up with health care for the self-employed, and retirement planning will become an even bigger issue.

    Agree !

  19. dsimard says:

    @carmen101: neat chart. Thanks for the tip. Interesting that the job loss rate always seems to peak just after the recession ends. Seems like that could be a while this time around.

  20. Gonzalo Lira says:

    E says, “Gonzalo, if unemployment rates are as high as you predict, then $100 will be worth a lot more than it is now.”

    Gonzalo says, Not if Obama and the Fed decide to inflate away the staggering debt.

    What with the massive stimulus (which incidentally is the size of all outlays for the Iraq war), which will be all-debt, and the tremendous amounts of Treasury bonds that are coming to market, needed to fund all this stimulus and all these bailouts, the only logical end to this is that the Fed will be forced to buy Treasuries. The bid/ask ratio on bonds has falled from the historically standard 2.10 to 2.15 range, to 1.8 in the past quarter. And that’s not taking into account the massive debt issuance that Treasury is about to bring to market.

    Couple this with the coming crash of prime mortgages and the bonds that were derived from them, not to mention CRE and credit card debt . . . oh yeah: Inflate away is the way ahead. It will be counched as the “sensible” thing to do, and there will be a lot of talk that this is no big deal, this is the “responsible” thing to do. But the dollar will be inflated during 2009.

    U-3 at 15% by year’s end. Inflation at 15% and rising steadily by year’s end. Gold at $1,400 by year’s end. 2010 will be the year of reckoning insofar as the dollar is concerned.

    Those are my bets. Any takers?

  21. fenner says:

    Barry, Marvelous chart! Perfect correlation with Bush’s approval rating too.

  22. rww says:

    Gonz, I’ll take the bet. Don’t know how much I would wager, maybe not too much, but it is certainly a possibility that no matter how much money the Fed prints, it will not even come close to compensating for the amount of wealth being destroyed.

  23. ironman says:

    BR: Never trust information coming from a politician’s office. You’re almost guaranteed that they’ve omitted relevant data that runs contrary to whatever position they’re pushing.

    In this case, Bill Polley has produced a chart showing the trend in job losses for every recession since World War 2. Where the current recession’s employment decline fits is given away by his post title: Employment losses continue to be in line with 1981-82 recession.

  24. super_trooper says:

    No end in sight? The only hope to decreased rate in unemplyment is the stimulus package? How about another war? Iran is 3 times the size of Iraq…….. 3 times the amount of spending…….. and triple the f*&kup
    @Gonzalo, if inflation at 15%, the housing crisis will soon have reached the end for those with 30-year fixed mortgage .
    Total inflation 1929-34, -20%,
    Total inlation 1934-40, 4%

  25. Jim C says:

    Strange thing is the I knew many, many people that got laid off in 2001-2002, yet I know only one person that has been laid off recently.

  26. rktbrkr says:

    Speaking of freelancers – you’ll know things are bad when you have English speakers showing up at the latino mustering locations!

  27. ottovbvs says:

    dsimard Says:

    February 7th, 2009 at 9:34 am
    I think a better way to adjust would be by the size of the population. That relates number of jobs with number of people which makes more sense than size of the economy
    The chart won’t look as bad if you do that. Of course it might keep getting worse, but that’s another matter

    Krugman has a good chart up showing civilian employment as a % of pop going back to the early nineties. It ain’t pretty. Population/employment ratio is probably the best way to measure employment. One of the factors that’s often forgotten in this effort by Shlaes and co to prove FDR caused the depression is that between 1932 and 1939 is the working pop rose by about 10% .

  28. usphoenix says:

    Agree that employment as % of population taken in combination with job losses as a % of employment provide the most accurate decomposition in terms of body count. Then you have to dig inside income models to figure out what’s happening to families: family income models adjusted for MEQ. Job loss as a % of population skews what’s really happening to the workforce.

    But the %loss/employed shows a pretty steep dive that shows no sign of bottoming or mitigating. And that’s most disconcerting.

  29. Hammergirl says:

    Help me out – I’m definitely not an economist: what about all the freelancers and consultants (1099′s) who are now out of work? Where do these numbers show up? I have many friends who have lost their contracts and are unable to claim unemployment. These are professionals who were making $50 to $125/hour.

    Where are statistics that show the real number of people who are available for work? I believe this number must be huge!

  30. DL says:

    The unemployment rate is still not that bad.

    And the social safety net is far better than it was 40+ years ago. And we also now have bailouts galore. Psychologically, things may be different; we haven’t had a significant recession since 1982.

  31. DL says:

    Hammergirl @ 1:09

    This is from Alan Abelson’s column today:

    “By the alternative method of tallying lost jobs — the so-called household survey — a whopping 1.24 million slots disappeared, the biggest loss since the Bureau of Labor Statistics first began to keep track in 1950. Bad as those numbers are, they don’t reveal the full horror of the employment picture. Our favorite out-of-work measure is U-6, which takes in the entire lot of folks who can’t find a job worthy of the name. It shot up to still another record peak of 13.9% (a year ago, it was 9%). And the jobless rate among full-time workers weighed in at 8%”.

  32. JohnnyVee says:

    Great chart. I’d like to see a chart of job growth after the respective recessions, because the job recovery from the 2000-2001 was anemic. Meaning the job losses today are more significant.

  33. Broken says:

    @ DL:

    That just proves the unemployment rate is a near-meaningless number. 3.5 million jobs lost in 12 months after a very weak job recovery from the last recession, and unemployment is “not that bad”.

  34. wnsrfr says:

    The U.S. needs to mature–we need shorter work weeks and more vacation time per full-time employee, so that more of us can be gainfully employed.

    The means of production have become too efficient, and we have all that near-slave labor in China and India doing manufacturing…what else are we going to do?

  35. Mark A. Sadowski says:

    Are we at an end? That is to say, has the rate of decrease in jobs itself decreased? If not, then expect things to get worse (Duh!). The Great Depression II has just started.

  36. Blissex says:

    «The means of production have become too efficient, and we have all that near-slave labor in China and India doing manufacturing…what else are we going to do?»

    Losers will become servants of the deserving winners. Butler, maids, gardeners, footmen. That’s the logic of a plantation economy.

  37. Blissex says:

    «The means of production have become too efficient, and we have all that near-slave labor in China and India doing manufacturing…what else are we going to do?»
    Losers will become servants of the deserving winners. Butler, maids, gardeners, footmen. That’s the logic of a plantation economy.

    Of course if peak oil happens, only the lucky few will get such good jobs as house servants. Most will have to work on farms as say labourers to compensate for the demechanization of agriculture, which has gone from being labor intensive to oil intensive (all that farm machinery and fertilizer) and might revert to labor intensive.

  38. try2bamused says:

    Simple back-of-the-napkin calculation: At the rate of job loss over the last 12 months, we reach 100% unemployment in 5 years. Cheers!

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