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Monday, October 4, 2010

Job Growth During the Recovery

Linda Levine
Specialist in Labor Economics

Congress in recent years passed a number of bills intended in part to jump-start a recovery in the labor market from the recession that began in December 2007. Policymakers are interested in how employment has responded to stimulus measures to determine how effective the legislation has been and to decide whether additional job creation legislation is warranted.

One way to assess the extent of recovery in the labor market since the passage of stimulus legislation is to compare employment data from the end of the recession in June 2009 with more recent data gathered in surveys that the government regularly conducts. Accordingly, to determine if and how much job growth has occurred thus far in the recovery, this report examines the change in the number of jobs over the June 2009-August 2010 period. (August 2010 was the latest month for which data were available at the time of the report’s preparation.) To provide historical context, the results are compared with job growth at a comparable point (14 months) from the start of the prior 10 recoveries of the postwar period. Data for August 2010 are compared with December 2007, as well, to discern how close the number of jobs has come to the level at the recession’s onset, and to provide historical context, the results are compared with job growth at a comparable point (32 months) from the start of the prior 10 recessions. Lastly, employment data by job and individual characteristics in December 2007, June 2009, and August 2010 are analyzed to ascertain how different sectors and demographic groups have fared in recent years.

A “jobless recovery” has been underway since the recession’s end in June 2009. That is to say, the number of jobs at private and public sector employers generally decreased between June 2009 and August 2010. After falling in the second half of 2009, overall employment rose through May 2010 partly as a result of the Census Bureau hiring workers temporarily to help conduct the decennial count of the population. Total employment subsequently resumed declining, driven in part by state and local governments laying off workers in an effort to address budget shortfalls. In contrast, after decreasing for six months from the recession’s end, the number of jobs in the private sector (i.e., excluding federal, state and local government) began to steadily increase in January 2010. Despite this recent job growth, there were fewer jobs at private sector firms in August 2010 than at the recession’s end.

Employment rebounded faster during almost all of the prior 10 recoveries of the postwar period. At a comparable point in the business cycle (14 months into the current recovery as of August 2010), the number of jobs overall and in the private sector exceeded their levels at the start of eight earlier recoveries. The exceptions are the two recoveries that immediately preceded the current one (i.e., the recoveries that followed the 1990-1991 and 2001 recessions).

Two of the industry groups hardest hit by the recession—construction and manufacturing—have continued to lose jobs during the recovery, although at a lower rate than during the recession. Some of the states with the most depressed housing markets as well as manufacturing-dependent states have experienced relatively large decreases in total employment (Arizona, California, Florida, Indiana, Michigan, Nevada, Ohio). Smaller job losses among women than men during the recession partly are explained by construction and manufacturing having predominantly male workforces. Larger job losses among women than men during the recovery partly are explained by women’s substantial presence in the occupations (e.g., teachers) that account for much of local and state government workforces. 

Date of Report: September 30, 2010
Number of Pages: 15
Order Number: R41434
Price: $29.95

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