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Friday, December 30, 2011

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 (e.g., P.L. 111-5 and P.L. 111-226). Members of the 112th Congress are interested in the labor market’s response to these measures to help them decide how well the legislation has worked and whether additional job-creation legislation may be warranted in light of the pace and composition of job growth since the recession’s official end in June 2009 (e.g., H.R. 12 and S. 1549, S. 1723).

One way to assess the extent and nature 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 November 2011. (November 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 during the 10 prior recoveries. Data for November 2011 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. Employment data by job and individual characteristics for December 2007, June 2009, and November 2011 also are analyzed to ascertain how different sectors and demographic groups have fared during the recession and recovery.

A “jobless recovery” prevailed across employers in the private nonfarm sector until March 2010. That is to say, after the latest recession’s end in June 2009, the number of private-sector jobs generally continued to fall until nine months into the recovery. The recovery was jobless until October 2010, 16 months into the recovery, across all employers. At that point, net job growth in the total nonfarm economy began not because government employment started to rise but because it fell more slowly while private sector employment continued to grow. Despite the number of jobs on employers’ payrolls having exceeded its level at the recovery’s start, a few more years will likely elapse before the 7 milion-8 million jobs lost during the recession are recouped given the pace of job growth in 2011.

The two industries hardest hit by the recession have been recovering at different rates. While manufacturing employment in November 2011 surpassed its level at the recession’s end, construction jobs were almost 500,000 shy of their total in June 2009 . Some of the states with the most depressed housing markets as well as manufacturing-dependent states have experienced relatively large job losses (Arizona, California, Florida, Indiana, Michigan, Nevada, and Ohio). Smaller job losses among women than men during the recession are partly explained by construction and manufacturing having predominantly male workforces. Further job losses among women during the recovery compared with gains among men are partly explained by women’s substantial presence in the occupations (e.g., teachers) that account for much of local and state government workforces. The employment of Hispanic workers returned fairly quickly to its level at the recession’s start, despite the ethnic group’s concentration in the hard-hit construction industry. Hispanic employment also is concentrated in the leisure and hospitality industry group, which, as of November 2011, had recouped about 98% of jobs lost during the recession. Workers with at least a bachelor’s degree fared better than less educated workers during the recession and recovery, having regained all their job losses.

Date of Report: December 12, 2011
Number of Pages: 14
Order Number: R41434
Price: $29.95

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