Payroll employment has fallen by 6.9 million net jobs, or 5 percent, since the recession began in December 2007. That sharp decline is much worse than the average employment loss during a recession.

Click to enlarge chart.

There have been 11 other recessions since the end of World War II, and only two of them included similarly severe job losses. However, those recessions were relatively short. The 1948-49 recession lasted 11 months and the 1957-58 downturn lasted just 8 months, but the current recession has lasted 20 months (and still counting).

As the accompanying chart shows, the job market rebounded quickly after those earlier episodes. Twenty months after the recessions began, employment had returned to its pre-recession level. In contrast, in today’s economy we have yet to end the job losses let alone start making them up. Eventually the job market will recover, but given the unusual combination of severe job losses and prolonged recession, the recovery could also be unusually difficult.

And if the next economic recovery follows the pattern of the “jobless recoveries” that followed the two most recent recessions, in 1990-91 and 2001, the road for the labor force could be that much more painful.

This article has been adapted from a longer article on employment in the latest issue of Research Reports, available free to AIER subscribers or $2 for non-members.

Bookmark this article: