In the wake of the awful unemployment report this morning I decided to look at the employment picture a bit more closely for some of the hardest hit sectors of the economy, namely the Construction, Manufacturing and Financial sectors.
The Manufacturing numbers are broken down between the relatively more stable non-durable and the more volatile durable goods groups. The graph below tracks the total employment for each sector.
The news item that construction lost 64,000 more jobs and that manufacturing lost 51,000 does not quite convey just how hard-hit these sectors have been. It shows that manufacturing has been hurting for a long time. The peak number of people employed in both Durable and Non-Durable manufacturing was actually hit back in June…of 1979. The decline since then on the durable side has been more pronounced, off 41.96%, but it has also been more jagged, normally recovering a bit during economic recoveries (the last one being a big exception).
Non-Durable goods employment has been more relentless, and is now 36.83% below that Carter Era peak. Clearly those problems go far beyond the current recession, and keep in mind these are absolute numbers and the population has increased fairly significantly since then.
However, just because you are already down, it doesn’t mean the economy can’t kick you some more. Since the recession started, durable manufacturing jobs have fallen by 18.08%, and are down 14.80% over the last year. Non-Durable jobs have held up better, but only in a relative sense. They are down 9.51% since the start of the recession and off 7.32% over the last year. This is sort of to be expected since in a downturn people are more likely to stop buying cars from Ford (F) than they are to stop buying toilet paper and toothpaste from Procter & Gamble (PG).
Construction is normally a volatile sector in terms of employment (blue line) but has generally been in a secular upward trend, along with population. However it has been particularly hard this time around due to the popping of the real estate bubble. Usually it does not pick up again right after a recession ends either, and with commercial real estate in the process of going into the crapper, it seems like there will be continued declines for some time to come.
The peak in construction employment came a little bit before the overall economy fell into recession, in January 2007. From the peak, it is off 21.96%, and from the start of the recession employment is down 19.74%. Over the last year, the number of construction jobs is down by 15.33%.
Normally, Finance is a pretty safe place to work, at least in terms of the industry overall. However, Wall Street has been at the center of the storm, and was responsible (in large part) for the difficulties the rest of the country is facing.
That said, the downturn in total employment has not been particularly severe for this group. Peak employment was hit in December 2006, and since then employment is off 7.89%. Since the official start of the recession Finance jobs are down 6.56%, while over the last year they have fallen by 5.09%. Ken Lewis and Chuck Prince aside, probably more clerks and tellers are pounding the pavement than investment bankers.
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