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Sunday, December 12, 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 despite the recession’s official end in June 2009.

One way to assess the extent of recovery in the labor market is to compare employment data from the end of the recession 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 between the recovery’s start in June 2009 and October 2010. (October was the latest month for which data were available at the time of the report’s preparation.) Data for October 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. To provide historical context, the results are compared with job growth during the 10 prior recessions and recoveries. Lastly, employment data by job and individual characteristics are analyzed to ascertain how different sectors and demographic groups have fared.

A “jobless recovery” has been underway since the latest recession’s end. That is to say, the number of jobs at private and public sector employers generally decreased between June 2009 and October 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 through September, 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.

Employment rebounded faster during almost all of the prior 10 recoveries of the postwar period. At a comparable point in the business cycle (16 months into the current recovery as of October 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. 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. Workers with at least a bachelor’s degree not only fared better than less educated workers during the recession but they also fully recouped all their job losses by October 2010

Date of Report: December 1, 2010
Number of Pages: 14
Order Number: R41434
Price: $29.95

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