"Where We Are and Where We Were"

[Clio the Leo]

Where We Are and Where We Were
Posted by Jared Bernstein on February 8, 2010 at 2:51 PM EST

Along with a massive snowstorm, Friday brought a blizzard of new info on the job market. From the perspective of our work at the White House, two points stand out, one about where we are and the other about where we’ve been.

First, while there are encouraging signs regarding jobs, they are early signs and must be viewed with care. The job market is clearly doing better than it was but the level of unemployment is miles north of where it needs to be. Unemployment fell significantly last month, which is good, but a) it’s a one month data point and not yet a new trend, and b) it fell from 10% to 9.7%, and that's still an unacceptably high rate of joblessness.

Second, today's data release has new, revised information on just how bad this recession has been in the job market. Here a chart is worth a lot of words.
The chart plots the course of payroll employment over the last four recessions, including this one. In each case, we index jobs at the start of the recession to 100%, and the x-axis shows the number of months from when the recession began.

By setting it up this way, you get a lot of useful, comparative information across different downturns. For example, you see how much longer it took to regain the lost jobs in the 1990 and 2001 recession compared to the 1981 version.

But the main point is how severe this recession has been on job loss. There are two lines in the graph for the current recession because last week's data provided a revision based on more complete data. We knew it was bad, but it turned out to be even worse. We thought we were losing an unprecedented 690,000 jobs per month in the first quarter of last year. It turned out to be 750,000. In the four months between December 2008 and March 2009, we lost more jobs than during the last two recessions combined.

That's where we were. Where we are, as noted, is better but not good enough. Last month, we lost 20,000 jobs and that's not an outlier—it's another data point in an improving trend moving towards net job gains, which we expect to be seeing in a few months. But the job market won't be in recovery until those small negatives turn into big positives.



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http://www.whitehouse.gov/blog/2010/02/08/where-we-are-and-where-we-were