Employment loss and the 2007-09 recession: An overview

Monthly Labor Review

Volumn 134, Issue 4, 2011, Pages 3-12

  Goodman, Christopher J ^a   Mance, Steven M ^a  

^a BUREAU OF LABOR STATISTICS   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 79955943762     PISSN: 00981818     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (57)

1. Recessions are identified by the National Bureau of Economic Research (NBER). According to the NBER, the most recent recession began in December 2007 and ended in June 2009. The previous two recessions were from March 2001 to November 2001 and from July 1990 to March 1991.
2. For a complete list of business cycle dates, consult the NBER webpage at http://www.nber.org/cycles/cyclesmain.html (visited Nov. 2, 2010).
3. The data on employment used in this article are from the CES survey, which is a monthly survey of approximately 140,000 nonfarm businesses and government agencies representing approximately 440,000 individual worksites.
4. For more information on the CES program's methods, see " Technical Notes to Establishment Survey Data Published in Employment and Earnings" at http://www.bls.gov/web/cestn2.htm (visited Mar. 31, 2011).
5. CES data are available at http://www.bls.gov/ces (visited Mar. 31, 2011).
6. The CES data used in this article are seasonally adjusted unless otherwise noted
7. The current CES monthly total nonfarm payroll employment series goes back to January 1939
8. The term "Great Recession" has been used in numerous publications and is now considered an accepted term by the Associated Press
9. The data on unemployment rates used in the article are from the Current Population Survey (CPS)
10. CPS data are available at http://www.bls.gov/cps (visited Mar. 31, 2011).
11. The CPS data used in the article are seasonally adjusted unless otherwise noted
12. Housing is not a defined industry. Activity related to the housing market cuts across a variety of industries and includes activities such as residential construction, financial activities, manufacturing, and retail sales.
13. For a complete overview of health care employment trends, see Catherine A. Wood, "Employment in health care: a crutch for the ailing economy during the 2007-09 economy," Monthly Labor Review, this issue, pp. 13-18.
14. Richard K. Green, "Follow the Leader: How Changes in Residential and Non-residential Investment Predict Changes in GDP," Real Estate Economics, June 1997, pp. 253-70.
15. This article looks at the relationship between GDP and residential investment and nonresidential investment. Green finds that residential investment tends to begin rising before the trough of the business cycle begin falling before the peak. Nonresidential investment lags the overall business cycle and appears to be more a symptom than a cause of economic downturns.
16. Data on new housing starts, permits, and home sales are produced by the U.S. Census Bureau. For more information on starts and permits, see http://www.census.gov/const/www/newresconstindex.html (visited Dec. 22, 2010).
17. For more information on new home sales levels and prices, see http://www.census.gov/const/www/newressalesindex.html (visited Dec. 22, 2010).
18. Eric Belsky and Joel Prakken, Housing Wealth Effects: Housing's Impact on Wealth Accumulation, Wealth Distribution and Consumer Spending (Cambridge, Mass., Harvard University, Joint Center for Housing Studies, 2004), http://www.jchs.harvard.edu/publications/finance/w04-13.pdf (visited Mar. 31, 2011).
19. BusinessDictionary.com defines the wealth effect as "changes in aggregate demand caused by change in the value of assets such as stocks, bonds, gold, property" and explains, "Increase in the market value of these assets induces a feeling of being 'richer' in their owners (even if no additional cash is realized) and often tends to encourage spending and to dampen savings."
20. See http://www.businessdictionary.com/definition/wealth-effect.html (visited Dec. 22, 2010).
21. Data on U.S. household real estate assets are from the Federal Reserve's Flow of Funds release.
22. See http://www.federalreserve.gov/RELEASES/z1/Current/z1r-5.pdf (visited Dec. 19, 2010).
23. The net worth of households and nonprofit organizations rose by 39.9 percent between 2003 and 2006.
24. Alan Greenspan and James Kennedy, Sources and Uses of Equity Extracted from Homes (Washington, DC, Board of Governors of the Federal Reserve System, March 2007), http://www.federalreserve.gov/pubs/FEDS/2007/200720/200720pap.pdf (visited Dec. 15, 2010).
25. See table 2 on pp. 16-25.
26. Belsky and Prakken, Housing Wealth Effects
27. http://www.census.gov/const/www/newresconstindex.html.
28. Data on delinquency are from the Mortgage Bankers Association's National Delinquency Survey.
29. See http://www.mbaa.org/ResearchandForecasts/ProductsandSurveys/NationalDelin quencySurvey.htm (visited Mar. 31, 2011).
30. Danielle DiMartino and John V. Duca, "The Rise and Fall of Subprime Mortgages," Economic Letter-Insights from the Federal Reserve Bank of Dallas, November 2007, http://www.dallasfed.org/research/eclett/2007/el0711.html (visited Jan. 7, 2011).
31. James D. Hamilton, Causes and Consequences of the Oil Shock of 2007-08 (Washington, DC, Brookings Institution, February 2009, revised March 2009), http://www.brookings.edu/economics/bpea/~/media/Files/Programs/ES/BPEA/2009_spring_bpea_papers/2009_spring_bpea_hamilton.pdf (visited Mar. 31, 2011).
32. Crude oil prices are from the Bureau of Labor Statistics Producer Price Index program, series WPU056, and were extracted on Dec. 23, 2010.
33. Table 2.3.1, "Percent Change From Preceding Period in Real Personal Consumption Expenditures by Major Type of Product" (Bureau of Economic Analysis, National Income and Product Accounts), www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=61&Freq=Qtr&FirstYear=2008&LastYear=2010 (visited Dec. 23, 2010).
34. Hamilton, Causes and Consequences of the Oil Shock of 2007-08
35. For an overview of mining employment trends, see Brian Davidson, "Mining employment trends of 2007-09: a question of prices," Monthly Labor Review, this issue, pp. 19-23.
36. Both the 1990-91 and 2001 recessions lasted 8 months, but employment continued to decline after the end of both recessions
37. Data on lending standards are available from the Federal Reserve Board's Senior Loan Officer Opinion Survey on Bank Lending Practices.
38. See http://www.federalreserve.gov/boarddocs/snloansurvey/ (visited Mar. 31, 2011).
39. The CES 1-month diffusion index measures the dispersion of employment change across industries over the month. The overall index is calculated from 267 seasonally adjusted employment series (primarily 4-digit NAICS industries) covering all nonfarm payroll employment in the private sector. To derive the index, each component industry is assigned a value of 0 percent, 50 percent, or 100 percent, depending on whether its employment showed a decrease, no change, or an increase, respectively, over the month. The average value (mean) is then calculated, and this percent is the diffusion index number.
40. For an overview of trends in construction employment, see Adam Hadi, "Construction employment peaks before the recession and falls sharply throughout it," Monthly Labor Review, this issue, pp. 24-27.
41. Nonresidential construction spending is based upon the Bureau of Economic Analysis's nonresidential structures investment component of GDP
42. See Table 1.1.6, "Real Gross Domestic Product, Chained Dollars" (Bureau of Economic Analysis), line 8, http://www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=6&FirstYear=2009&LastYear=2010&Freq=Qtr (visited Jan. 8, 2011).
43. For a complete overview of manufacturing employment trends, see Megan M. Barker, "Manufacturing employment hard hit during the 2007-09 recession," Monthly Labor Review, this issue, pp. 28-33.
44. For an overview of temporary help employment trends, see Frank Conlon, "Professional and business services: employment trends in the 2007-09 recession," Monthly Labor Review, this issue, pp. 34-39.
45. For an overview of trends in financial activities employment, see George Prassas, "Employment in financial activities: double billed by housing and financial crises," Monthly Labor Review, this issue, pp. 40-44.
46. For an overview of retail trends, see Michael D. McCall, "Deep drop in retail trade employment during the 2007-09 recession," Monthly Labor Review, this issue, pp. 45-48.
47. For an overview of trends in leisure and hospitality employment, see Eliot Davila, "Employment in leisure and hospitality departs from historical trends during 2007-09 recession," Monthly Labor Review, this issue, pp. 49-52.
48. "Off their trolleys," The Economist, May 7, 2009, http://www.economist.com/finance/displaystory.cfm?story_id=13611284 (visited Dec. 22, 2010).
49. Julie Hatch, "Employment in the public sector: two recessions' impact on jobs," Monthly Labor Review, October 2004, pp. 38-47, http://www.bls.gov/opub/mlr/2004/10/art3full.pdf (visited Apr. 4, 2011).
50. See "NCSL Fiscal Brief: State Balanced Budget Provisions" (Washington, DC, National Conference of State Legislatures, October 2010), http://www.ncsl.org/documents/fiscal/StateBalancedBudgetProvisions2010.pdf (visited Jan. 12, 2010).
51. "Quarterly Summary of State and Local Tax Revenue" (U.S. Census Bureau), http://www.census.gov/govs/qtax/ (visited Jan. 12, 2011).
52. The Economic Impact of the American Recovery and Reinvestment Act of 2009, Second Quarterly Report (Washington, DC, Council of Economic Advisors, Jan. 13, 2010), p. 10, http://www.recovery.gov/About/Documents/100113-economic-impact-arra-second-quarterly-report.pdf (visited Dec. 23, 2010).
53. Christopher W. Hoene and Michael A. Pagano, "City Fiscal Conditions in 2009" and "City Fiscal Conditions in 2010" (Washington, DC, National League of Cities) http://www.nlc.org/ASSETS/E0A769A03B464963A81410F40A0529BF/CityFiscalConditions_09%20(2).pdf and http://www.nlc.org/ASSETS/AE26793318A645C795C9CD11DAB3B39B/RB_CityFiscalConditions2010.pdf (visited Jan. 12, 2011).
54. Municipalities rely on State funding for about 12 percent of their budgets
55. "Quarterly Summary of State and Local Tax Revenue." Local tax revenues were calculated as the difference between the national total of State and local government tax revenue and the national total of State tax revenue.
56. "City Fiscal Conditions in 2009" and " City Fiscal Conditions in 2010."The years referred to are the 2008 and 2009 fiscal years, as defined by individual municipal corporations.
57. For an overview of trends in average weekly hours, see Steven Kroll, " The decline in work hours during the 2007-09 recession," Monthly Labor Review, this issue, pp. 53-59.