Over the past few months, I’ve heard that, while job creation is insufficient to keep unemployment rates constant, job losses have not been consistent with recession. More recently, we’ve heard a slight modification on this “talking point”. Commenting on the August 1 labor market release, WSJ RealTime Economics notes:
So far this year, the economy has shed nearly half a million jobs — hardly a sign of strength.
But it could have been much worse. In testimony before a congressional panel Friday, Bureau of Labor Statistics Commissioner Keith Hall noted that the last two recessions had resulted in 1.5 million lost jobs. “Economic growth is not strong enough to support job growth,” he told legislators, but he added that relative to the last set of official recessions, job losses this time around “have not been as severe.”
In Figure 1, I plot nonfarm payroll employment, the civilian employment series from the household survey adjusted to conform to the NFP concept, and aggregate weekly hours for private industries.
Figure 1: Log nonfarm payroll employment (blue), civilian employment adjusted to conform to the NFP concept (red), and aggregate weekly hours in private industry (green), normalized to zero in 2007M12, all seasonally adjusted. Source: BLS via FRED II, BLS, and author’s calculations.
What is clear is that while the employment series might not be evidencing a severe dropoff, the hours series is [Update: this point has been made previously by Spencer at AB]. This is relevant because growth in hours is at levels consistent with at least the last two recessions. Actually, the hours growth rate is now negative.
Figure 2: 12 month change in nonfarm payroll employment (blue), civilian employment adjusted to conform to the NFP concept (red), and aggregate weekly hours in private industry (green), calculated as 12 month difference in log levels. NBER defined recessions shaded gray. Source: BLS via FRED II, BLS, NBER, and author’s calculations.
Aggregate weekly hours have been experiencing continuous negative growth on a month-to-month basis since January 2008…