Weekend charts: the destruction of the "goods-producing" payroll
The BLS establishment survey (nonfarm payroll) reports that the accumulated job loss since December 2007 is 5.02% (almost 7 million jobs), blowing the total job loss of the previous “biggie” recessions, the 73-75 and 81-82 recessions, out of the water by 2.5% and 2%, respectively. There’s no question that it has been bad, with almost every industry slashing payroll.
The chart illustrates the total accumulated job loss across the major industries spanning December 2007 to August 2009 (nonfarm payroll listed here). Assuming that the recession is over (the consensus and key indicators seem to indicate that a business cycle trough has been found), then there are just two men left standing (adding jobs over the cycle), education and health services and government (barely). Even the historical job anchors , other services, professional and business services, and financial activities, are down between 1.8 and 8%! The job loss is broad and deep.
However, the industry contributions to total job loss show that the job destruction is heavily weighted in manufacturing and construction, which account for roughly half of the total drop in nonfarm payroll (-2.5% of the total -5%). But manufacturing and construction hold just a 16% share of the entire payroll.
Productivity numbers, i.e., growing amid record output loss, would suggest (even manufacturing productivity saw growth in Q2 2009) that factories are running on skeleton crews, which is efficient given the drop in demand. And a resumption of aggregate demand may be partially satisfied by adding hours, but that will only go so far. Firms will need to hire, and hire soon after demand starts to grow again.