This Employment Report Is No Way To Start A New Year

Despite the fact that the decline in non-farm payrolls was less than expected last month-524,000-today’s employment report was awful. Unemployment is up to 7.2%, though some put it as high as 13.5% using a measure that includes part time workers and those that have given up on the job market. See the graph below courtesy of Jake at

Among the most startling statistics was the number of lost jobs as well as the accelerating pace of layoffs. For all of 2008, the economy lost 2.6 million jobs, 1.9 million of those jobs were lost in the last four months. This is of a piece with the incredible speed with which economies around the world have deteriorated. It is unprecedented and I’ve yet to see an analysis of why it happened so quickly. I confess to not having a clue, but I suspect that there is something very important about the rapidity of the decline.

For a quick look at what some economists have to say about the report follow this link to the WSJ Real Time Economics site. Here is a sample:

  • December’s employment report was terrible, but perhaps not quite as terrible as many in the markets had feared… Possibly the weakest area of the report was the decline in hours worked. Average hours per week declined to 33.3, the worst on record; the three-month annualized decline in hours worked is a whopping 7.7%. The December decline is so large that we wonder if some special factor could be work, although we have no obvious candidate for this. –Goldman Sachs
  • Overall, it’s hard not to conclude that we have a very sick economy. By the looks of it at this point in time, I would venture to say that it is getting sicker, certainly not improving and probably not stable.

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