Meet the Author

Yoonsoo Lee |

Research Economist

Yoonsoo Lee

Yoonsoo Lee was formerly a research economist in the Research Department. His areas of research include macroeconomics, labor economics, and regional economics.

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.

03.10.09

Economic Trends

The Employment Situation, February 2009

Yoonsoo Lee and Beth Mowry

The labor market lost 651,000 jobs in February, meeting expectations and bringing the total tally of losses since the start of the recession to 4.4 million. Downward revisions increased December and January declines by 104,000 and 57,000, respectively. Additionally, the unemployment rate increased by half of a percentage point, to 8.1 percent.

Payroll losses characterized every part of the economy, with the lone exceptions of the education and healthcare and government sectors. The diffusion index of employment change currently sits at 23.8, meaning only 23.8 percent of industries are increasing employment. This is up slightly from January’s reading of 23.2 but still considerably lower than most months this past year, and lower than the average reading of 38 during the 2001 recession. Goods-producing jobs declined by 276,000, and service-providing jobs declined by 375,000. Within goods, losses were split between construction (−104,000) and manufacturing (−168,000). Residential and nonresidential construction suffered about equally.

On the services side, the trade, transportation, and utilities sector shed 124,000 jobs last month, with transportation taking the largest hit (−44,900) in this category. Truck transportation was responsible for 33,400 of those losses, making February the worst month on record for the industry since April 1994.

Financial activities lost 44,000 jobs in February, comparable to the losses of recent months. January’s report was officially the sector’s worst performance to date. Information payrolls declined by 15,000, and leisure and hospitality declined by 33,000. Professional business services had the worst month on record (−180,000), owing largely to losses in temporary help services (−77,700). Education and health services added 26,000 jobs last month, although the health side was responsible for all the additions (30,400). Education employment, which has mostly risen throughout the current downturn, declined by 4,200. The government sector added a modest 9,000 jobs, continuing its mostly positive employment trend.

Labor Market Conditions
  Average monthly change (Thousands of employees, NAICS)
2006 2007 2008 February 2009
Payroll Employment
178
96
−257
−651
Goods-producing
5
−34
−126
−276
Construction
15
−16
−57
−104
Heavy and civil engineering
3
0
−6
−5.2
Residentiala
−5
−23
−35
−51.1
Nonresidentialb
16
6
−16
−48
Manufacturing
−14
−22
−73
−168
Durable goods
−4
−16
−54
−132
Nondurable goods
−10
−5
−19
−36
Service-providing
173
130
−131
−375
Retail trade
3
14
−44
39.5
Financial activitiesc
9
−10
−19
−44
PBSd
45
25
−63
−180
Temporary help services
2
−7
−44
−77.7
Education and health services
39
43
43
26
Leisure and hospitality
33
21
−21
−33
Government
17
24
14
9
Local educational services
6
8
1
13.4
  Average for period (percent)
Civilian unemployment rate
4.6
4.6
5.8
8.1
  1. Includes construction of residential buildings and residential specialty trade contractors.
  2. Includes construction of nonresidential buildings and nonresidential specialty trade contractors.
  3. Financial activities include the finance, insurance, and real estate sector and the rental and leasing sector.
  4. PBS is professional business services (professional, scientific, and technical services, management of companies and enterprises, administrative and support, and waste management and remediation services.
  5. Source: Bureau of Labor Statistics.

Private sector employment payrolls dropped 660,000 jobs last month, roughly similar to activity in December and January. The magnitude of losses in the past three months has been higher than twice the greatest monthly losses of the 2001 recession. Finding larger declines in private employment would require looking all the way back to the late 1940s and mid-1950s.