85k Jobs Lost In December, 7.24m Lost Since January 2008 (Charts), 10% Unemployment

By TheBasisPoint, January 8th, 2010

The Bureau of Labor Statistics non-farm payroll report showed that the economy lost 85,000 private sector jobs in December, and November was revised to a positive 4,000 jobs. This means 23 of the last 24 months have shown losses, putting the job loss toll since January 2008 at 7.24 million, which is the largest drop (as a percentage of all jobs) since World War II ended in 1945. In 2009, 4.16 million jobs were lost. BLS also reported that 15.3 million people are unemployed. This is a 10% unemployment rate, up 5.1% since the recession began in December 2007. See charts below.

Additionally there are now 9.2 million people (unchanged from last month) who would like to work full time but are working part time because their hours have been cut or they can’t find full-time jobs. This forced-into-part-time-work category is up 4.5 million since January 2008, but has been little changed in the past eight months. This is the fine print of the jobs report—the headline job loss and unemployment statistics show that these 9.2 million people are employed and therefore not in the job loss category, but because of their job status these 9.2 million workers aren’t likely to be consuming at normal levels.

Going forward for first six months of this year, we will see hiring for the 2010 Census have an impact on jobs numbers—these are temporary workers hired for the census count that happens every 10 years. The government will hire about 1.15m workers for this, and according to a forecast from Bloomberg by economist Lori Helwing at BofA Merrill Lynch Global Research, that hiring may boost payrolls by a peak of 700,000 in May before those workers begin getting dismissed in June. Even the BLS confirms that it will be difficult to get a handle on the job count because of the Census hiring:

In Spring 2010, the U.S. Bureau of the Census will begin collecting demographic data for the decennial census as directed by the U.S. Constitution. Initial preparation begins up to a year and a half prior to the actual Census Day (April 1, 2010) and involves thousands of temporary workers to conduct address canvassing and follow-up. Short-term field operations have very dynamic staffing levels that vary from day to day. During the various phases, the temporary and intermittent nature of the work can result in significant changes in monthly employment estimates as measured by the Current Employment Statistics (CES) survey. Hiring for the census is reflected in data for Federal government. The following chart and tables detail the impact of the 2010 Census on CES Federal government employment estimates.

Chart 1 below shows the jobs growth trend from January 2008 to present. Chart 2 below shows which industries jobs were lost or gained last month. Chart 3 shows how job levels have behaved in the last 10 years, with shaded areas representing recessions. Here is the full BLS jobs report.

CHART 1: MONTHLY JOB GAIN/LOSS JANUARY 2008 TO DECEMBER 2009