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There is some truth to the often-repeated claim that the current recession is the worst in a generation. Many adults in the labor force today may not remember another significant downturn.
The prior recession, in 2001, was so mild that the real gross domestic product, a measure of the quantity of goods and services produced within United States, did not decrease on a year-over-year basis. The previous full-fledged recession, during which the GDP fell by 1.4 percent, took place in 1990-91.
Between the end of that downturn in April 1991 and the onset of the current recession in December 2007, the economy enjoyed 200 months of virtually uninterrupted growth. By 2007, a large proportion of adults in the labor force had little or no experience with recessions. Almost half of them would have been only 23 or younger in 1991, too young perhaps to remember that recession.
People whose experience included only the extremely mild recession of 2001 were unlikely to grasp the depth to which economy can sink for an extended length of time. Against this background, the current recession can seem particularly severe.
For most people, the greatest dread of recessions derives from the fear of losing their jobs. And a recovery is often judged by how fast jobs are created. The data show that, when it comes to employment, the experience of different sectors during business cycles varies greatly.
The lead article in the upcoming Research Reports takes a close look at the employment fluctuations in major sectors of the U.S. economy during the 10 business cycles since 1949. Analysis of this information suggests the likely pattern of the employment changes in the upcoming recovery.
For example, in past recoveries, the two sectors with fastest employment growth were education and health services and professional and business services. These sectors are likely to grow fast in the upcoming recover as well, possibly making them an attractive career choice. But the fate of some other sectors is both less rosy and less certain.
One of the trends that emerge prominently from the data is the difference between employment in private industry and employment in government. Private employment is strongly influenced by business-cycle forces, but government employment grows virtually uninterrupted. The second article in the Research Reports investigates this dichotomy between private and government employment and discusses its implications.
This article has been adapted from a longer article in the latest issue of Research Reports, available free to AIER subscribers or $2 for non-members. Also in this issue:
- Business Cycle Conditions - October 2009
by Shafayat Chowdhury, Research Associate
- Ask the Expert: In-Kind Giving
Giving in-kind has its own rules for taking deductions.
by Kevin T. McGrath, CPA, tax partner with BST Advisors, LLC
To subscribe to AIER Research Reports, please become an AIER member. Membership starts at just $39 per year.
Already a member? Keep your eye out for the October 5 issue of Research Reports hitting your mailbox or inbox soon.
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