Here are the job market and compensation numbers for March 2008 (based on the job report):
Net loss of 80,000 jobs in the month (revised in April ’08 to 81,000 loss)
- 38,000 more than expected by Economists (50,000 loss expected)
- 63,000 job loss is the worst in almost 5 years
- February revised to 76,000 loss
- January was revised to a 76,000 loss as well
- Three straight months of job losses
- 232,000 jobs lost so far in 2008 – estimated by the Labor Department
- Analyst predicts job losses every month through August
- A recent survey found 6% of US employers are already trimming compensation budgets and 10% are considering it
Unemployment rate moved up to 5.1%
- Near three year high
- Economists had forecast the unemployment rate would rise to 5%
- The household survey saw an even bleaker result – 434,000 saying they are unemployed in March
- Over the last year 591,000 people are working part time but want to work full time (outside of agriculture)
Wages were up 0.3% for March
- Average hourly wages up 5 cents
- Average wage is $17.86 an hour
- 3.6 total raise year over year – adjusted for inflation than means pay was a loss – consumer prices rose 4% concurrently
- Weekly earnings are up 3.3% over the past year, still behind inflation
Specific Segment Job numbers:
Construction lost 51,000 workers – down in both residential and non-residential (unemployment in the industry went from 9% to 12% over the past year)
Manufacturers lost 48,000 jobs – durable goods took the largest losses
Retailers showed a 12,000 loss
Business and Professional services lost 35,000 jobs
Health care added 23,000 jobs and 363,000 over the last year
Other increases occurred in education, government, and leisure and hospitality
Other information:
The private sector as a whole loss 98,000 jobs
Private sector jobs are down 300,000 from November 2007
Items pulled from EPI:
According to our analysis of Census Bureau data, the income of the typical (median) working family was lower in real terms in 2007 than at the end of the last business cycle, in 2000
Recently, the rate of nominal (i.e., not inflation-adjusted) wage growth, measured year-over-year, peaked in March 2007 at 4.2%. By February 2008, that rate had slowed to 3.7%, a 0.5% deceleration. Note that inflation has grown more quickly over this period, due largely to rising energy and food costs. Real hourly wages have thus been flat or negative since October 2007.
As EPI economist Josh Bivens points out in forthcoming work evaluating the last business cycle (assuming the cycle peaked in December), the employment rate actually fell over this cycle, by 1.6 percentage points (March 2001-December 2007). This is the first cycle on record marked by a decline in the employment rate. It is also a potent indicator of the weakness of labor demand over the cycle, and one reason why workers’ bargaining power was never strong enough to create much real wage pressure during this period.
Working Thoughts 