Job Creation: Post-Recession Recovery Cycles
This is the updated version of the chart I used yesterday, showing this 2003-08 cycle, courtesy of Spencer England's Economic Research.
As you can see, this was the weakest in terms of NFP job creation of all the post-recession recoveries since WWII.
click this for ginormous version
Bush Boom? Hardly . . .
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Saturday, April 05, 2008 | 08:00 AM | Permalink
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» More NFP: Worse than Reported from The Big Picture
This weekend, we noted that in terms of job creation, the 2002-07 post-recession recovery was the very worst in the post-WWII era. This was in response to the pundit commentary that job losses aren't nearly as bad today as the 2001 mild consumer-led re... [Read More]
Tracked on Apr 7, 2008 10:12:40 AM
Comments
Barry, I sent the comment, but neglected to check Name and Email before sending. My bad. It usually pops up quickly, and I'm still bleary eyed. LOL!
Posted by: SPECTRE of Deflation | Apr 5, 2008 8:24:58 AM
BR: neither does this address the nature of the job gains and losses. Basically there has been massive expansion in govt (or govt contracting), construction and the services generally but particularly healthcare. Meanwhile massive losses in manufacturing. Well now construction is now on the long slide and we're going to see some contraction in services.
Posted by: john | Apr 5, 2008 8:43:35 AM
Barry, from Salon and yank if inappropriate. I want everyone to look surprised for the pictures just like CONgress this week:
"The next time we have Black Monday"
In the most unexpected demonstration of the thesis that all things are interconnected in a myriad of nonobvious ways, I received an e-mail today from a now-retired reporter named Stephen Pizzo.
Back in 1995, Pizzo and I were colleagues at the Pleistocene-era online magazine Web Review, a daring experiment in the new world of online journalism bankrolled by computer book publisher O'Reilly & Associates. I was a freelancer who was writing madly about the Internet for anyone who would pay me. Pizzo was an established reporter who had coauthored a well-received book on the savings-and-loan crisis. His honed hard-news reporting chops were a welcome complement to the rest of the staff's geeky cyber-enthusiasms.
Pizzo had been reading my coverage recently of Wall Street's economic misadventures, and wanted to draw my attention to testimony he gave in Congress in 1991, at a hearing exploring proposed legislation aimed at deregulating the commercial banking industry.
Prescient is too mild a word to describe Pizzo's testimony. I recommend reading it in its entirety, so as to savor the full flavor of his brimstone and fire. But here is a choice excerpt, featuring Pizzo's prediction as to the likely baleful consequences of allowing commercial banks to play with securities.
As we autopsied dead savings and loans, we were absolutely amazed by the number of ways thrift rogues were able to circumvent, neuter, and defeat firewalls designed to safeguard the system against self-dealing and abuse. One of the favorite methods was to link up like-minded thrifts in the daisy chains through which they could circulate inflated assets and hide their rotten loans to each other and to each other's customers from regulators.
Banks that need to get money to a troubled securities affiliate will do exactly the same thing. By linking up three or more banks, each with its own securities subsidiary, a daisy chain will facilitate a round robin of reciprocal loans in times of need. Then, the next time we have a Black Monday on Wall Street, this daisy chain will swing into action as a handful of mega-banks try to prop one another's securities subsidiaries and their customers as the market plummets.
In such a scenario, billions of federally insured dollars will disappear in the twinkle of a few program trades.
That will happen, not might happen but will happen, and when it does these too-big-to-fail banks will have to be propped up with Federal money. In the smoking aftermath, Congress can stand around and wring its hands and give speeches about how awful it is that these bankers violated the spirit of the law, but once again, the money will be gone, the bill will have come due, and taxpayers will again be required to cough it up.
Nice work, Stephen. Too bad they didn't listen to you.
-- Andrew Leonard
Posted by: SPECTRE of Deflation | Apr 5, 2008 8:44:08 AM
It truly is incredible. I am an English major (no quant credentials here!) and no MBA, but I saw it coming as soon as Glass Steagall went away. Any congress person or bank regulator or bank executive who claims to not have seen this coming is full over overpriced fertilizer...what makes me crazy is that the folks getting laid off now and into the future, for the most part, did nothing wrong and now will pay for others greed...
Posted by: lurker | Apr 5, 2008 9:06:50 AM
If you want to see something scary,
take a look at the chart I created illustrating the y/y % change in Service Employment excluding the more stable Health & education jobs.
See "The Precipice"
Posted by: Will Rahal | Apr 5, 2008 9:33:17 AM
Monica,
I thought the article was about rate of recovery / job growth. Jobs lost from Clinton era? All those manufacturing jobs we have lost? Were they Clinton era jobs? The growth of govornment jobs were caused by the enlargment or diminishment of govt. ?
Lets not even mention the diminishment of the US dollar, partialy caused by accelerating debt combined with lower interest rates.
Get out of your blue dress, and reread the article, there will be a test.
Posted by: alexd | Apr 5, 2008 9:39:33 AM
I think Barry's point re the Bush boom is that there has been no effort to create more job growth, only spin on how great the economy has been. We will only be able to wonder what might have been, if we had faced up to the issues the past several years. Before anyone takes me on politically, you also have to blame the Dems here for being such ineffectual opponents to this incompetent administration. This sayhs a lot about our ability to change the dynamics of this situation.
Posted by: larry | Apr 5, 2008 9:45:35 AM
Turns out that the only thing Bush has been good at is throwing out the first pitch.
Posted by: edhopper | Apr 5, 2008 9:50:56 AM
What would the line look like if we added all the jobs created elsewhere by American businesses?
Posted by: Paul Jones | Apr 5, 2008 10:06:04 AM
All you Bush bashers do not realize (or intentionally playing it down) that Bush had inherited a recession from Clinton, that Bush had to deal with 9/11 destruction and Katrina Mess (courtesy of incompetent and corrupt local democratic governor and mayor).
P.S. Barry, you have been reading too much of NYT liberal propaganda lately. All of your posts are tilted to one-sided and bizarre thinking lately, very similar to NYT ultra-liberal propaganda.
~~~
BR: Yes, its apparent that I am the one here who is the political extremist, George . . .
Posted by: George | Apr 5, 2008 10:13:28 AM
Will Rahal - Nice chart! Thanks for providing link.
Posted by: UrbanDigs | Apr 5, 2008 10:19:02 AM
"Don't tax you, don't tax me. Tax that fellow behind that tree!" Ev Dirksen.
To hell with politics. A pox on both their houses. Statesmanship went out with high button shoes.
Posted by: Ross | Apr 5, 2008 10:20:34 AM
SPECTRE:
I have a rule of thumb I use - after watching the S&L debacle - that has served me quite well in the run-up to this fiasco:
Any time (actually, the first time) you hear a banker/loan officer/lender utter the words: "we have a new financing vehicle" (or any variation of that phrase), put your money/valuables someplace safe (outside our financial system), divest your holdings in the industry using the new vehicle.
Such statements are the bellweather of criminal goings-on and the precursor of substantial financial losses.
It is a harbinger of the liberalization of our financial system.
P.S: I get 10 points for using the words "bellweather, precursor, and harbinger" in a single comment.
Posted by: Marcus Aurelius | Apr 5, 2008 10:27:44 AM
SPEC:
Please forgive the following:
To Monica and George:
Do y'all hold your under-performing stocks until they are valueless - based on the mistaken belief that since you chose them, must be good?
Your "Conservative, MBA President" - in addition to being the most liberal politician to ever hold the position of POTUS - has failed at every enterprise he has initiated. He is nothing but an obstinate, spoiled child, and we will pay through the nose for not putting him in a time-out (prison).
If you disagree, suggest you read the Constitution.
As for the Clinton "recession", you need only look at Republican budget deficits and cozy relationship with corporate interests to see whence our current nightmare originated.
George: Bush had warnings about 9-11, and did NOTHING. That's a fact, Jack. As for Katrina, do a little research into why the LA State/local authorities couldn't implement their evacuation plans. Specifically, check Blackwater's role in the evacuation/law enforcement process (they order US soldiers around under threat of violence in Iraq, as I'm sure you are aware - think of what they could get away with when imposed on a civilian population).
Bush is not only a failure and responsible for our current situation, he is an abject failure and fully responsible.
Keep voting against your own self-interests. You deserve what you get.
Posted by: Marcus Aurelius | Apr 5, 2008 10:46:52 AM
Posted by: Be Greedy When There Is Too Much Fear, Be Fearful When There is Too Much Greed
___
Considering our current predicament, I hope you enjoy your soon-to-be valueless "wealth" (which you have gained at the cost of the destruction of our national economy).
I'm sure you would never sell your country out for 30 pieces of silver.
The "greed is good" meme has been debunked.
Posted by: Marcus Aurelius | Apr 5, 2008 10:51:51 AM
It is just strange to me that some people actually think the recession was caused by Clinton and not Greenspan. There is no logic where you can blame Clinton for something that was the result of a string of rate hikes he had no control over. Note that he didn't have control over the loose policies of Greenspan prior to 2000 either.
And somehow the hundreds of thousands of manufacturing jobs lost post 2001 are related to the popping of internet bubble. It is this Rush Limbaugh quality logical thinking that got us into this mess in the first place. Right now, we are bailing out the major investment banks to the tune of hundreds of billions of dollars. The total bailout is going to total 2 to 3 trillion dollars, and these clowns are blaming a guy who wasn't responsible in the first place and has been out of office for seven years. Farce has become tragedy. I guess for 28% of the population, there are no facts, only opinions to be debated, mostly along the lines of "I cant understand why you hate Bush and not Clinton. Clinton was a popular president who presided over a huge economic expansion and Bush has presided over the worst economic expansion in modern history that ended with the largest bailout of the financial industry in history, so you should hate Clinton because I do."
But I guess some people will never give up.
Anyway on to commenting on the chart...
What pops out at me on this chart is just how much lower this recovery is than the average recovery of the last 50 years. As this recession/depression hits, the losses are going to be incredible, and we are starting from a low peak.
We are lucky that our standard of living is so high that we can afford to lose 10% or so and not have it be horrible for citizens of the United States. Back in the 30's this was not the case and resulted in bread lines.
Barry, I know you are not stupid, and your writing about this horrible recovery has been essential reading for the entire financial industry. When you put out the posts on the real rate of inflation over the last decade and then a separate post on how GDP is related to the inflation rate, all the non-Bush fans out here get the "Big Picture". You are saying we've had negative economic growth over this entire cycle by some measures.
I work in the financial industry with an alphabet soup of letters after my name. I am shocked at how much money some people make for not really doing anything other than taking a bag of money from one person, counting it, dividing it up, handing it to another person, and then reversing the process in 3 minutes, days, months, or years.
When the humans of the 50 years from now future look back upon this last 35 years, they are going to wonder why we allocated most of our civilizational resources to skimming money from worthy enterprises to put in the hands of already wealthy people.
Posted by: mickslam | Apr 5, 2008 10:56:56 AM
Marcus says - hear "we have a new financing vehicle" run
what did / do you think of Regional Housing Stress Instruments (paraphrased - dont know the real name or symbol)?
Posted by: Greg0658 | Apr 5, 2008 10:59:21 AM
Posted by: Greg0658 | Apr 5, 2008 10:59:21 AM
____
Are you referring to the new government-based, bail out strategy (I don't know the name, either)?
If that's what you are referring to, the cure will be worse than the disease.
I am referring specifically to new "financing vehicles" offered by the industry. You can bet on 2 things regarding new types of financing:
1. They are liberal to the extreme.
2. They remove or avoid the regulations that are there to keep this shit from happening. In doing so, they open the door to massive criminality in the form of fraud.
Behind every regulation or law, is someone who was robbed, beaten, defrauded, or otherwise hurt by the liberal actions of others.
Behind every 25 MPH speed limit in a residential area is a kid who got hit by a speeding car.
Posted by: Marcus Aurelius | Apr 5, 2008 11:13:44 AM
To mickslam
Clinton years assisted big business and Republican controled Congress to outfit China with manufacturing prowless
Wal*Mart ad champaigns
80's - Buy American
90's - Always Low Prices
present - Save Money. Live Better
Clinton years were great because of manufacturing manufacturing and exporting it
Thats my take and I'm sticking with it
Posted by: Greg0658 | Apr 5, 2008 11:16:05 AM
You don't have to look far to discover the reason for the jobless recovery - there has been no real recovery, only a jobless bubble in the FIRE (Finance, Insurance, Real Estate) economy.
Posted by: Winston Munn | Apr 5, 2008 11:24:30 AM
Posted by: Be Greedy When There Is Too Much Fear, Be Fearful When There is Too Much Greed | Apr 5, 2008 11:19:11 AM
___
This shit is seriously OT, but your propaganda must be rebutted, so here goes:
It's a well known and documented fact that Rice and Bush received specific information on the 9-11 attacks from their own NSA staff (in the form of a NIE), but chose to ignore them. Clinton was out of office for over a year, by then. On a tangential note, whatever happened to the Anthrax attack investigation, which was post-9-11? Who dances for the Saudis (the hijackers were overwhelmingly Saudi)?
Like I said, do a little research on why the school busses you refer to were not allowed to cross the bridge into NO. Hint: evac routs go one way: outbound. Then check who turned them around: Blackwater mercenaries (who were not hired to provide this "service", and who over-billed the government, retroactively, for providing them. If you were a bus driver and a masked person dressed in black tactical gear pointed a military weapon in your face and told you to turn the bus around, would you ask to see ID?
If you think all of this BA crap is on the up-and-up, you are intellectually dishonest, at best.
That's my last word on the subject. Im taking SPECTRE's advice and sticking to econ subjects for the rest of this thread.
How 'bout dem shallow shallow job creation numbers?
BR is THE MAN.
Posted by: Marcus AureliusM | Apr 5, 2008 11:55:08 AM
I will repeat here what I have been saying about President Bush for several years now:
He was a dealt a lousy hand, but he played the cards he was given about a poorly as possible.
Posted by: Barry Ritholtz | Apr 5, 2008 11:56:46 AM
UrbanDigs
The rate of decline is striking!
The charts suggests a bottom in late
2008 or early 2009.
Posted by: Will Rahal | Apr 5, 2008 12:19:08 PM
I thought that health care jobs were the most secure job one could have and that as an industry it could raise prices at will because people get sick and need help.
However, of recent, I've noticed that hospitals are floundering and hospitals are shutting down not-so-profitable departments, such as mental health, and strongly competing for profitable business, such as cardiology. In addition, expansion projects are being cancelled.
It appears that an industry that use to be price inelastic is no more. It's even true for health care that when prices get too high, people stop paying. Any comment???
Posted by: Johnnyvee | Apr 5, 2008 12:21:54 PM
Talk about the "internet bubble" puzzles me. My view is that a lot of people were chasing many of the same ideas. They found investors. Some of those investors lost money because better ideas won the race to realization. That sounds like capitalism at work. MEANWHILE, back at the ranch, the number of internet users continues to rise, new ideas are constantly becoming businesses with new services and employees. What does it mean for this "bubble" to burst?
Posted by: Ritchie | Apr 5, 2008 12:22:24 PM
