The Friday Payroll Green Shoot

Bob K. Mando asked:

actually, i wonder how much the unemployment numbers went "down" because of people falling off of the unemployment rolls due to excessive time receiving benefits?

The short answer is, "all of it." The above chart shows not the unemployment rate (massaged as that is) but the percentage change of reported non-farm payroll jobs from the number reported at the beginning of the recession. Today we see, 24 months after it started, that there are about 5% fewer jobs reported.

Which is enlightening in that at 24 months from the average post 1950 recession, all the jobs are usually back and we go on from there. The "jobless recovery" of 2001 took 48 months to recover all the jobs, even though the total lost was never more than 2%, and that nadir was hit 30 months after recession started.

So here we are with 66% of that time expired, yet with two and half times as many jobs lost as a percentage of the whole*. We may be reaching the bottom or not. But as we are still losing jobs every month**, it is not unreasonable to expect that we may be a decade or more away from 2007-style employment numbers.

* And with absolutely unprecedented monetary stimulus to boot.

** And the Birth/Death adjustment in January is going to be a whopper. Expect close to a cool million jobs to disappear in a puff of statistical revision.

(hat tip: Casey Research)