It’s now official: The country has lost more jobs as a percentage of peak employment than any time since the Great Depression.
This includes the recessions of the early 1980s, even when they are combined.
Those looking for a v-shaped recovery keep insisting that jobs will come roaring right back, the way they did in the 1948 recession (see the blue line in the chart from Calculated Risk below).
Anything’s possible, but this seems unlikely. In 1948, U.S. consumers were not still saddled with the massive debts that are stifling consumption today. And consumers still represent 70%+ of spending.
The other interesting point with respect to the 1948 “V” is that we have now gone as many months from the peak as it took employment to recover in full in the 1948 recession. And we’re still losing jobs.
Most importantly, regardless of what the jobs recovery eventually looks like, it hasn’t started yet. The economy is still losing 250,000+ jobs a month. The average workweek, which should be the first indicator to turn up, also fell in August to match its record low. This would not seem to be consistent with a sustained, v-shaped recovery.
UPDATE: Calculated Risk has published another version of this chart, one that shows the impact of estimated revisions to the jobs numbers. It looks even worse.
Here’s CR’s explanation:
The dashed line is an estimate of the impact of the large benchmark revision (824 thousand more jobs lost).
The graph compares the job losses from the start of the employment recession in percentage terms (as opposed to the number of jobs lost).
Instead of 7.2 million net jobs lost since December 2007, the preliminary benchmark estimate suggests the U.S. has lost over 8.0 million net jobs during that period.