The September Employment Situation

Things are getting better, aren't they?

The (revised) second quarter GDP data show a decline (on an annual basis) of only 0.7% (compared with the preliminary estimate of 1%). And even the 1% decline is a lot less than the fourth quarter 2008 and first quarter 2009 nnumbers.

But, as we (sadly) have come to expect, the employment situation continues to show little or no strength.

*The unemployment rate (as usual, the headline number, but perhaps not the most important piece of information) rose slightly, from 9.7% to 9.8%. And it's up from 6.2% in September 2008, and from 4.6% at the peak of the business cycle in November 2007.

*The employment-population ratio (the percentage of the non-institutionalized population with jobs) continued its decline, to 58.8%, down from 59.2% in August, down from 61.9% a year ago, and down from 63% at the November 2007 business cycle peak.

*The labor force participation rate (the percentage of the non-institutionalized population that is actively participating in the labor force--either employed or actively seeking work) is down to 65.2%, from 65.5% in August, from 66% a year ago, and from 66.1% in November 2007. Furthermore, it has now declined from its all-time high of 67.3% (in January and February, 2000).

*Employment continues to decline. As measured by the household survey, employment fell by 0.56% between August and September, and has declined by 4.25% over the past year and b y 5.32% since November 2007. The other employment measure, based on a survey of businesses ("establishment" employment) fell by (slightly) less than did household employment; it's down by 0.2% compared to August. But the longer-term declines are similar--4.23% over the past year and 5.13% sice November 2007.

If we compare the current recession to the 1980-82 twin recessions, the employment-population ratio has declined by more (down 4.2 percentage points so far, compared with a decline of 2.8 percentage points from January 1980 to November 1982). The unemployment rate has risen more (up 5.1 percentage points, compared with an increase of 4.8 percentage points then). And the percentage declines in employment are larger as well (down more than 5% in this recession, down--depending on our measure--somewhere around 3% then).

This is increasingly feeling like it's going to replace the 1980-82 twin recessions as "The Worst Recession Since the Great Depression" (TM), which doesn't make me, or anyone I know, particularly ecstatic.