And things get worse in the labor market
Today, the BLS released its report on the Employment Situation for December 2008. If you really want the details, click through and read it. The lowlights:
*The unemployment rate jumped from 6.8% to 7.2%, its highest level since January 1993. It's worth noting that, in both of the most recent recessions, the unemployment rate continued to rise even after the economy began to recover. I don't think anyone thinks we're at the trough yet.
*Employment, measured by the household survey, fell by 806,000 between November and December. It's now down by about 3 million since its cyclical peak in January 2008.
*Employment, measured by the establishment survey, fell by 524,000 between November and December, and is down by about 1.9 million over the past 4 months. Establishment employment has now declined for 12 consecutive months and is about 2.5 million below its cyclical peak in December 2007.
(And I'd like to thank Brad Delong for reminding us that these data are now nearly a month old...things have clearly not improved since early-to-mid December.)
Of additional interest is a report on the number of workers who are employed only part time as a result of what the BLS refers to as "economic reasons;" this is often called involuntary part-time employment. Here's the lead: "In November 2008, 7.3 million persons were employed part time for economic reasons, up by 3.4 million from a recent low of 3.9 million in April 2006." But the reality is worse than that. Looking at Chart 1 in the report, it appears that involuntary part-time employment has increased from about 4.5 million at the beginning of 2008 to 7.3 million in November--an increase of over 60%. In other words, almost all of the increase in involuntary part-time employment has occurred since the current recession began.
This is one of the facts that lead some observors to argue that the unemployment rate does not provide as accurate a measure of labor market distress as we might like. And, in fact, involuntary part-time employment generally rises sharply in recessions. In the 2001 recession, it rose by 12% or so; in the 1990-91 recession, by about 40%; in the 1980-82 recessions, by40%; and in the 1974-75 recession, by about 33%. So, in this recession, the rise in involuntary part-time employment has been, as usual large--but, compared to recent recessions, much larger than average.
This does lend support to the conclusion that this recession is deeper than the increase in unemployment and in the unemployment rate have suggested. Comparisons to the 1980-82 recessions look more and more appropriate.