Recession damage to the US labor market: the tracks of our tears [jp morgan research] $SPY

The recent financial crisis and associated economic downturn were extremely painful across many dimensions. The downturn was the longest recession since World War II and one of the deepest. And household wealth destruction resulting from sharply lower house and equity prices was unusually steep. But the defining characteristic of the recession is probably the hit to the labor markets. Payroll employment is now 6.1% below its previous cyclical peak in December
2007. The percentage decline in employment is roughly double that associated with any other recession in the past 60 years. Job reductions have been associated with both an unusually large and rapid rise in the unemployment rate and a sharp drop in the labor participation rate.

The annotated charts on the following pages provide more detail on the effects of the recession on the US labor market. They show:

• Employment in construction and in manufacturing has declined much more than employment in the services-producing industries. Employment in construction has declined 26% since December 2007, while employment in all services-producing industries has declined less than 4%.

• Similarly, the rise in the unemployment rate has been especially severe for workers in the goods-producing industries. In February the unemployment rate for workers in the construction industries was 22% nsa and the unemployment rate in manufacturing was 12% while the unemployment rate in financial activity industries, for example, was slightly less than 7%.

Research HERE

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