Every year we release our Job Market Perspectives report, which details the current state of the job market broken down by industry sector and region. The report also contains important topics and useful information such as a 2013 year in review, a summary of the last five years, as well as an executive polling section where we take a look at what business leaders are seeing and what challenges we face moving forward.
To coincide with the 2014 Job Market Perspectives Report release, we are publishing a three-part blog series to highlight some of the information in the report. In part one, we’ll discuss the 2007-2009 recession and what impact it had on the job market. In part two, we’ll present a recap of 2013 and show the progress we’ve made in the last year, and in the final installment we’ll present a “sneak peak” of what to expect in 2014.
Part One: The Recession
There are many attributes to a recession – a downturn in the business cycle, a reduction of the GDP, and rising unemployment are just a few factors that signify a slowdown in economic activity. From late 2007 to mid 2009, the U.S. was locked into the greatest recession to hit the country since World War II.
Economists identify that the official start of the Recession began in December of 2007, when the national unemployment rate crept up to 5.0%, and more than 7.7 million Americans were out of work. To add to the country’s woes, in September of 2008 investment banking giant Lehman Brothers filed for bankruptcy. This was the largest bankruptcy claim in U.S. history and it sent a wave of anxiety through the country. In the coming weeks and months, the government would step in to keep the major banks, the auto industry and homeowners afloat. But by this point, the national unemployment rate had risen to 6.1%.
In addition to these factors, there were other major events that added to the potency of the Recession. While the weight of these factors have been debated, here are some of the contributing elements to the most recent downturn:
- Subprime Mortgage Crisis & Bursting of the Real Estate Bubble
- Struggling Banks Causing a Credit Crunch
- International Trade Imbalances
- Government Revenue & Expenditure Fiscal Policies
The Impact on Jobs
According to Bureau of Labor Statistics report entitled “Employment loss and the 2007–09 recession: an overview”:
“Virtually no area of the economy remained unscathed from the December 2007 – June 2009 recession, particularly the labor market. Nonfarm payroll employment measured by the Current Employment Statistics program, peaked in January 2008, 1 month after the peak in the business cycle. After relatively modest job losses in early 2008, the losses increased sharply in the latter half of the year, and declines spread beyond traditionally cyclical industries.
The already-weak economy was jolted by financial market turmoil in fall 2008. The impact on employment was immediate and severe, with monthly job losses spiking to among the highest on record. At its lowest point, February 2010, U.S. employment had declined by 8.8 million from its prerecession peak.”
The most jolting drop on total non-farm payrolls came in March of 2009 when 830,000 jobs were lost in this month alone. This job loss sent the unemployment rate to 8.7%.
Though the unemployment rate would fall to its lowest point in February 2010, economists identified June 2009 as the official end of the recession. Unemployment rates have since fallen at a slow and steady pace. But as we near the fifth anniversary of the end of the recession, how much has actually changed? Are we in better shape on the labor front? Stay tuned for the second installment, where we’ll explore the year 2013 and the effect it had on the U.S. job market.