Meet the Author

Murat Tasci |

Research Economist

Murat Tasci

Murat Tasci is a research economist in the Research Department of the Federal Reserve Bank of Cleveland. He is primarily interested in macroeconomics and labor economics. His current work focuses on business cycles and labor markets, labor market policies, and search frictions.

Read full bio

Meet the Author

Beth Mowry |

Research Assistant

Beth Mowry

Beth Mowry was formerly a research assistant in the Research Department of the Federal Reserve Bank of Cleveland. Her work focuses on labor markets and business cycles.

12.05.08

Economic Trends

The Employment Situation, November 2008

Murat Tasci and Beth Mowry

November employment fell by 533,000 in the largest one-month drop since December 1974, coming in far worse than expectations. Additionally, payrolls in September and October were revised down to losses of 403,000 and 320,000, respectively. Since the start of the recession in December 2007, job losses in the United States have totaled about 1.9 million, roughly 1.3 million of which have come in just the past three months. The unemployment rate also continued its upward path, increasing 20 basis points to 6.7 percent, the highest rate seen since September 1993.

The diffusion index of employment change also sank from 37.8 to an unprecedented low of 27.6, meaning that only 27.6 percent of employers are hiring, while the remaining 72.4 percent are cutting jobs.

Job losses were across the board, with the only major areas posting any sort of gain being education and health services (+52,000) and government (+7,000). Goods-producing industries lost a total of 163,000 jobs, and this was spread evenly between construction (−82,000) and manufacturing (−85,000). Within manufacturing, the durable goods category shed almost triple the number of jobs that nondurables shed.

Service-providing industries dropped a massive 370,000 jobs in November, after experiencing downwardly revised losses of 286,000 and 183,000 in September and October. The only other time since the series began in 1939 that service industries lost more jobs was in August 1983. The retail trade sector lost 91,300 jobs, a large part stemming from auto dealers (−24,000). Declines in leisure and hospitality totaled 76,000, and information services lost 19,000. Professional and business services and financial activities each saw record losses (−136,000 and −32,000, respectively). Within professional and business services, the employment services sector alone lost 100,000 jobs.

Labor Market Conditions

  Average monthly change
(thousands of employees, NAICS)

2005

2006

2007

YTD
2008

November
2008
Payroll Employment 211 175 91 −174 −533
Goods-producing 32 3 −38 −96 −163
Construction 35 13 −19 −47 −82
Heavy and civil engineering 4 3 −1 −7 −12
Residentiala 23 −5 −20 −27 −35.7
Nonresidentialb 8 14 1 −13 −33.8
Manufacturing −7 −14 −22 −55 −85
Durable goods 2 −4 −16 −41 −62
Nondurable goods −8 −10 −6 −14 −23
Service-providing 179 172 130 −78 −370
Retail trade 19 5 6 −40 −91.3
Financial activitiesc 14 9 −9 −13 −32
PBSd 56 46 26 −49 −136
Temporary help services 17 1 −7 −36 −78.2
Education and health services 36 39 44 46 52
Leisure and hospitality 23 32 29 −14 −76
Government 14 16 21 19 7
Local educational services 6 6 5 4 −4.2
           
Civilian unemployment rate 5.1 4.6 4.6 5.6 6.7

a. Includes construction of residential buildings and residential specialty trade contractors.
b. Includes construction of nonresidential buildings and nonresidential specialty trade contractors.
c. Financial activities include the finance, insurance, and real estate sector and the rental and leasing sector.
d. PBS is professional business services (professional, scientific, and technical services, management of companies and enterprises, administrative and support, and waste management and remediation services).
Source: Bureau of Labor Statistics.

The three-month moving average of private sector employment growth dropped all the way from −295,000 to −429,000 last month. Private payrolls have seen losses in every month since December 2007, while government payrolls have declined in only one month during that same period.