Most everyone has seen the following chart of employment change from peak to peak for the past 11 business cycles. (Some analysts choose to ignore the 1943 recession for shock reasons, essentially making 2008 look the least appealing of them all.)
The label for each line represents the year in which the recession started; the vertical axis is the percentage change in employment from peak employment (2008, it was February 2008); the horizontal axis is the number of months since the respective peak (for 2008, it’s been 73 months since employment peaked at 138.365 million).
Source: Bureau of Labor Statistics
As is no surprise, for the 2008 recession the economy has yet to reach the previous peak of 138.365 million, making the current recovery/recession period the longest on record for which the BLS’ labor market statistics exist. The figure also shows the strength of the 1960s, 1980s, and 1990s post-recession recoveries/booms. Of the strongest recoveries/booms, the 1960s was the strongest in terms of percentage gain in employment, while the 1990s recovery/boom had the most staying-power, lasting 128 months from peak to peak. Perhaps unsurprisingly, although sad, the 21st century jobs picture hasn’t been great. The two weakest recoveries on record in terms of recovery strength are the most recent two – 2001 and 2008.
How Does Financial Employment Compare to the Economy As a Whole?
Let’s take a look at the financial employment peak to peak chart (click on the chart to enlarge and activate the animation).
As is likely no surprise to insiders dealing with Basel III or Dodd-Frank, the 2008 recession is the worst on record for financial industry employment. Overall, since peaking in January 2008, financial employment is still down 4 percent, only about 3 percent above the trough in of -7 percent in September 2010. Financial employment experienced the strongest recovery/boom following the 1960 downturn, gaining about 36 percent from the 1960 peak until experiencing another recession. The 1980s and 1990s recoveries/booms were also significant.
On the other end, the weakest recoveries/booms in the financial sector occurred in in 2001 and 2008. Perhaps surprisingly, the 2001 global recession did not mean overall job losses for the U.S. financial sector, rather, just a slowdown in overall employment growth.
It is interesting that financial employment is generally much more stable than the economy as a whole. That is, until the most recent recession. In addition to being more stable, the financial industry has been a growth accelerator since the beginning of the BLS’ employment time-series.
Comments on this entry are closed.