20  Monthly Labor Review • March 20

Substantial Job Losses in 2008

As measured by the Current Employment Statistics (CES) survey, totalnonfarm employment peaked at

138.2 million in December 2007, coinciding

with the official start of the current recession.1

This turning point marked the e

of a nearly 3-year employment expansion

totaling almost 5.4 million jobs. (See chart

1.) Job growth had slowed during 2007,

and then employment fell by 3.1 million (or

2.2 percent) during 2008, with declines in

most industry sectors. Furthermore, the job

losses were more widespread and severe

than during the previous two employment

contractions.

Manufacturing, construction, financial activities, and professional and business services had begun seeing job losses or weakened

employment growth in 2007, after which

they experienced a worsening employment

picture during 2008. Consumer-driven industries, such as retail trade and leisure and

hospitality, started to cut workers in 2008,

and employment declines accelerated during the last several months of the year. Only

health care, mining, and government industries continued to add jobs.

Several economic issues that faced the Nation in 2008 contributed to the employment

loss. Among such issues were continued

housing market troubles, record-high oil

and gas prices, rising costs of food, a financial crisis brought on by mortgage defaults,

Laura A. Kelter is a 

supervisory economist 

in the National Estimates Branch, Office 

of Employment and 

Unemployment Statistics, Bureau of Labor 

Statistics. E-mail: kelter.

laura@bls.gov

Employment losses in 2008 accelerated by year’s end

as continued weakness in construction, manufacturing,

and professional and business services spread

into consumer-driven industries

Substantial job losses in 2008: weakness

broadens and deepens across industries

Laura A. Kelter tightened credit, and weak retail sales.

Nonfarm job loss in perspective

Over the past three decades, the United

States experienced three employment contractions. 2 Following a peak in August 1981,

total nonfarm employment fell by 2.8 million through December 1982.Next,nonfarm

employment fell by 1.6 million (or 1.5 percent) during the 11 months of the 1990–91

contraction. Finally, nonfarm employment

reached a peak in February 2001 and then

fell by 2.7 million over the next 30 months.

The current employment contraction ran

through 2008 and has continued into 2009.

Compared with the previous contractions,

job losses in 2008 accelerated more rapidly.

During the first 8 months of the year, job

losseswere relatively mild,averaging 137,000

per month; then, in September and October,

losses accelerated to an average of 351,000

per month. A further acceleration took place

during November and December, to an average of 639,000 jobs lost per month.

In 2008, the employment contraction, in

terms of total nonfarm job loss, appears

most similar to the employment contraction that started in July 1981. (See chart 2.)

In both the 1990 and 2001 contractions,

employment flattened out 10 months after

its peak. In relative terms, both the 2008

contraction and the 1980 contraction saw
Monthly Labor Review • March 2009 21

Thousands Thousands

Employment contraction,

Feb 2001–Aug 2003:

2.7 million jobs

Employment contraction,

Jan 2008–Dec 2008:

3.1 million jobs

Employment contraction,

Aug 1981–Dec 1982:

2.8 million jobs

138,000

133,000

128,000

123,000

118,000

113,000

108,000

103,000

98,000

93,000

88,000

138,000

133,000

128,000

123,000

118,000

113,000

108,000

103,000

98,000

93,000

88,000

Jan 1980 Jan 1984 Jan 1988 Jan 1992 Jan 1996 Jan 2000 Jan 2004 Jan 2008

Chart 1. Total nonfarm employment contractions, seasonally adjusted, January 1980–December 2008

Employment contraction,

Jun 1990–May 1991:

1.6 million jobs

Chart 2. Total job losses over four contractions, percent change since total nonfarm employment peak

Percent Percent

0.2

0.0

–0.2

–0.4

–0.6

–0.8

–1.0

–1.2

–1.4

–1.6

–1.8

–2.0

–2.2

–2.4

–2.6

–2.8

–3.0

–3.2

–3.4

0.2

0.0

–0.2

–0.4

–0.6

–0.8

–1.0

–1.2

–1.4

–1.6

–1.8

–2.0

–2.2

–2.4

–2.6

–2.8

–3.0

–3.2

–3.4

Number of months after employment peak

–5 –4 –3 –2 –1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

December 2007

February 2001

June 1990

July 1981
Substantial Job Losses in 2008

22 Monthly Labor Review • March 2009

employment fall by about 2.2 percent 12 months after

the peak.

When was the last time...?

At the same time that several industries observed employment losses which had not been experienced in decades,

a number of other industries set record job losses in 2008.

(See table 1.) Nonfarm employment fell by more than 3.0

million,the largest 12-month loss, in absolute terms,since

October 1944–October 1945. During that period, losses

were attributed primarily to the contraction of defenserelated industries following the end of World War II. In

percentage terms, the last time employment fell by more

than 2.2 percent over the year occurred in 1982. Furthermore,job losses in November and December 2008 total

1.3 million—the largest 2-month loss of this magnitude

since September and October 1945,when the Nation lost

1.9 million jobs.

Total private employment declined by 3.2 million over

the 12 months ending in December 2008, the largest net

loss in the history of the series, which began in 1939.The

1-month diffusion index for private nonfarm industries

indicates that the scope of job loss widened in 2008. (See

chart 3.) In December,the 1-month diffusion index fell to

20.5—the lowest level in the series history (beginning in

1991)—from a peak of 64.9 in January 2006. This index

measures the dispersion of employment change by industry. A value below 50 indicates that more private-sector

industries are shedding jobs than adding them over a 1-

month span.The manufacturing 1-month diffusion index

also reached its lowest level, 10.2, since December 2001.

Several other CES data series showed a labor market in

deep contraction.Average weekly hours for production and

nonsupervisory workers on private payrolls fell by one-half

hour in 2008, to its lowest level, 33.3 hours. Although the

long-run trend of the average workweek has been declining since the series began in 1964, the decrease in 2008

was significant. Both manufacturing average weekly hours

and overtime hours of production workers also fell to record lows. Weekly hours fell below 40.0 for the first time

since January 1996, and overtime hours fell to 2.9—the

lowest level since May 1983. The factory workweek often

is cited as a leading indicator of economic activity.

The index of aggregate weekly hours—the product of

average weekly hours of production workers and average

weekly hours of nonsupervisory workers—is a coincident

index3that peaked in December 2007 and fell by 4.3 percent over 2008, with accelerating declines during the la

4 months of the year. The last time the aggregate hours

index fell by more than 4.3 percent occurred in the 12

months ending November 1982. The index of aggregate

weekly payrolls—the product of aggregate weekly hours

and average hourly earnings—reached a high in August

2008 and then declined through December.

Economy in crisis

Employment growth slowed in 2007 as housing troubles

and problems with subprime mortgages struck construction and related manufacturing industries, while consumer-driven industries continued to expand payroll

employment.4During 2008, poor economic news swe

the Nation as each additional economic weakness proliferated and permeated into the broader economy. Across

the board, economic indicators continued to plunge during the year. (See table 2.)

The housing crisis broadened into commercial and heavy

construction, deepening employment losses in construction and manufacturing and moving into housing-related

wholesale and retail industries. Furniture and home furnishings, as well as building material and garden supply

stores, were particularly hard hit.

Defaults on mortgages surged, especially for subprime

loans. According to one source, “Much of the housing

market’s problems were concentrated in the subprime,

adjustable-rate market, where homeowners with weak

financial backgrounds got loans they ultimately couldn’t

afford.” 5 As a result, the mortgage crisis became so severe

during 2008 that lenderstightened credit considerably and

some banks failed. About 65 percent of domestic banks

indicated that they had tightened their lending standards

for commercial and industrial loans to small firms.6

help reduce foreclosure rates and to encourage lending,

the Federal Reserve lowered the Federal funds rate to almost zero.7

The mid-2008 financial crisis put downwa

pressure on employment in the financial activities industry,in housing- and construction-related industries, and in

industries that rely on consumer credit for large purchases

of durable goods, such as appliances and automobiles.

Record-high oil and gas prices permeated nearly every

industry during 2008 and affected consumers and companies alike, resulting in cash flow problems. Many companies tried to absorb rising shipping costs in order to retain

sales; in turn, this cost-minimization strategy led to jobs

cuts. Still, weak sales entering the holiday season pushed

many retailers into further layoffs and even bankruptcy.

According to the Wall Street Journal, “Companies are increasingly hitting their fixed cost wall, as many retailers

are at minimum staffing levels in stores and rent is fixed.”8
Monthly Labor Review • March 2009 23

Table 1. Comparisons among recent and historical changes and percent changes in employment, by industry, 

 selected data series

 

 Over-the-year When was the last time the

 change, change in employment was Current

 December larger in the same direction? Employment

 Industry 2007 to Statistics

 December series

 2008

Period Change inception

 (thousands) (thousands)

 

 

Total nonfarm employment ..................................... –3,078 Oct 1944–Oct 1945 –3,110 1939

 Total private................................................................. –3,241 Never ... 1939

 Construction ............................................................ –682 Mar 1943–Mar 1944 –717 1939

 Manufacturing ........................................................ –875 Oct 2001–Oct 2002 –912 1939

 Wholesale trade ...................................................... –194 Never ... 1939

 Retail trade................................................................ –530 Never ... 1939

 Transportation and warehousing..................... –166 Jun 2001–Jun 2002 –177 1972

 Information............................................................... –85 Mar 2003–Mar 2004 –87 1939

 Financial activities.................................................. –233 Never ... 1939

 Professional and business services.................. –753 Feb 2001–Feb 2002 –812 1939

 Leisure and hospitality......................................... –247 Never ... 1939

 Other services.......................................................... –40 Mar 1991–Mar 1992 –55 1939

 Over-the-year When was the last time the 

 percent percent change in employment was larger in Current

 change, the same direction? Employment

 Industry December Statistics

 2007 to series 

 December Period Change inception

 2008

 

 

Total nonfarm employment ...................................... –2.2 Dec 1981–Dec 1982 –2.3 1939

 Total private.................................................................. –2.8 Nov 1981–Nov 1982 –3.1 1939

 Construction ............................................................. –9.1 Aug 1990–Aug 1991 –9.6 1939

 Manufacturing ......................................................... –6.4 Aug 2001–Aug 2002 –6.5 1939

 Wholesale trade ....................................................... –3.2 Nov 2000–Nov 2001 –3.3 1939

 Retail trade................................................................. –3.4 Dec 1941–Dec 1942 –3.5 1939

 Transportation and warehousing...................... –3.6 Jun 2001–Jun 2002 –4.0 1972

 Information................................................................ –2.8 Feb 2003–Feb 2004 –2.9 1939

 Financial activities................................................... –2.8 Mar 1942–Mar 1943 –3.5 1939

 Professional and business services................... –4.2 Mar 2001–Mar 2002 –4.5 1939

 Leisure and hospitality .......................................... –1.8 Apr 1960–Apr 1961 –1.9 1939

 Other services........................................................... –.7 Apr 1991–Apr 1992 –.8 1939

 

 2-month When was the last time the 

 change from change in employment was larger in Current

 October 2008 the same direction? Employment

 Industry to December Statistics

 2008

Period Change

series

 (thousands) (thousands) inception

 

 

Total nonfarm employment ...................................... –1,278 Aug 1945–Oct 1945 –1,868 1939

 Total private.................................................................. –1,271 Aug 1945–Oct 1945 –1,587 1939

 Construction ............................................................. –225 Never ... 1939

 Manufacturing ......................................................... –301 Sep 1982–Nov 1982 –352 1939

 Wholesale trade ....................................................... –69 Never ... 1939

 Retail trade................................................................. –179 Never ... 1939

 Transportation and warehousing...................... –67 Sep 2001–Nov 2001 –81 1972

 Information................................................................ -42 Jan 2003–Mar 2003 –43 1939

 Financial activities................................................... –78 Never ... 1939

 Professional and business services................... –256 Never ... 1939

 Leisure and hospitality.......................................... –91 Jun 1989–Aug 1989 –102 1939

 Other services........................................................... –58 Never ... 1939

 
Substantial Job Losses in 2008

24 Monthly Labor Review • March 2009

At the same time, consumer confidence reached record

lows as consumers, with already limited credit and recent

problems filling their vehicles with gas, in turn cut spending on other products and services: “As prices near—or in

some places top—$4 a gallon, most Americans say they

are cutting back on other household spending, seriously

considering buying more fuel-efficient cars and consolidating their daily errands to save fuel.”9

The automobi

industry was particularly hard hit by high gasoline prices,

rising input costs, and the credit crunch. U.S. vehicle

manufacturers cut production throughout the year.

 

 When was the last time the series 

 Data series Level, December 2008 was lower than its current level? Series

 inception

 Month and year Level

 

Total private average weekly hours

 of production workers............................................. 33.3 Never ... 1964

 Manufacturing average weekly hours

 of production workers...................................... 39.9 Jan 1996 39.7 1939

 Manufacturing overtime hours

 of production workers...................................... 2.9 May 1983 2.8 1956

 Total private 1-month diffusion index ............. 20.5 Never ... 1991

Manufacturing 1-month diffusion index.............. 10.2 Dec 2001 9.6 1991

Table 1. Continued—Comparisons among recent and historical changes and percent changes in employment, 

 by industry, selected data series

Chart 3. Total private 1-month diffusion index, January 1991–December 2008

Index1 Index1

100

90

80

70

60

50

40

30

20

10

0

Lowest total private 1-month diffusion index in series history

Jan 1992 Jan 1994 Jan 1996 Jan 1998 Jan 2000 Jan 2002 Jan 2004 Jan 2006 Jan 2008

1

 Measures the dispersion of employment change. A value less then 50 means that more industries are losing jobs than adding 

them.

Accelerating job losses

Following on the heels of several industries that already had

been in decline in previous years, manufacturing, construction, financial activities, and temporary help services experienced a significant acceleration in job losses in 2008.

Manufacturing.  U.S. manufacturing employment fell by

875,000, to 12.9 million, reflecting the largest 12-month

job loss since 2002 and the lowest employment level since

1949. Monthly employment losses averaged 22,000 dur100

90

80

70

60

50

40

30

20

10

0
Monthly Labor Review • March 2009 25

Table 2. Comparisons among selected recent and historical economic indicators 

 2008 low point When was the last time this 

 indicator was lower?

 Indicators that reached a low point in 2008

Quarter or

 Quarter or Series

 

 month Level month, and Level

inception

 year 

Gross domestic product, annual growth rate

 (Bureau of Economic Analysis, percent)................................. Quarter IV –6.2 Quarter I, 1982 –6.4 1947

Purchasing Managers’ Index (Institute for Supply 

Management) .................................................................................. December 32.9 Jun 1980 30.3 1948

Capacity utilization (Federal Reserve Board, percent) ........... December 73.31 Apr 1983 73.16 1967

Motor vehicle assemblies, in thousands, seasonally

 adjusted annual rate (Federal Reserve Board)..................... December 6,614 Nov 1982 5,983 1967

Auto sales, in thousands, seasonally adjusted annual rate

 (Bureau of Economic Analysis).................................................. November 4,960 Never ... 1967

Consumer confidence (Conference Board)................................ December 38.6 Never ... 1967

New-home sales, seasonally adjusted annual rate

 (U.S. Census Bureau)...................................................................... December 344,000 Apr 1982 339,000 1963

Housing permits, seasonally adjusted annual rate

 (U.S. Census Bureau)...................................................................... December 547,000 Never ... 1960

Housing starts, seasonally adjusted annual rate

 (U.S. Census Bureau)...................................................................... December 560,000 Never ... 1959

 

 2008 high point When was the last time this 

 indicator was higher?

 Month and Level Month and Level

Series

 year year

inception

 

Rotary rig counts (Baker Hughes).................................................. Sep 2008 2,031 Feb 1985 2,143 1949

Inventory-shipments ratio, durable goods

 (U.S. Census Bureau)..................................................................... Dec 2008 1.81 Dec 1992 1.83 1992

Gasoline price, regular, all formulations (Energy

 Information Administration)...................................................... Jul 2008 $4.11 Never ... 1990

ing 2007 and accelerated to an average of 73,000 in 2008.

Job losses broadened across the manufacturing sector

as employment in housing and construction-related industries (including furniture and related products, wood

products, nonmetallic mineral products such as cement

and concrete products, and fabricated metal products)

worsened, export-related industries (including machinery and computer and electronic products) began to lose

workers, and auto-related manufacturing job losses accelerated at year’s end.The Institute for Supply Management

offered corroborating evidence of widespread weakness in

manufacturing when it reported that the index of national

manufacturing activity fell to a nearly three-decade low of

32.9 in December 2008.10

Compared with the last three contractions in total employment,the current contraction produced manufacturing

job losses most similar to those of the 1990 contraction,until accelerated job losses toward the end of 2008 pushed the

industry in the direction of experiencing job losses similar

to that of the weaker 1981 period.(See chart 4.)

Construction. Employment in construction grew by

average of 15,000 jobs per month in 2006 and fell by an

average of 15,000 per month in 2007. Losses then accelerated to an average of 57,000 jobs per month in 2008.

Construction-related employment losses also broadened

into service-providing industries during the year, including wholesale and retail trade. Employment in lumber

and construction supplies and in furniture and furnishings in wholesale trade fell in 2008 after reaching peaks

during 2006 and 2007, respectively. Furniture and homefurnishing stores remained stable during 2006 and 2007,

but lost an average of 5,000 jobs per month in 2008.

Building material and garden supply stores started seeing job losses in 2007 that continued at the same rate in

2008.

Housing indicators set record lows in 2008. Both housing starts and new-home sales fell, by 81 percent and

75 percent, respectively, since peaking in 2006, and the

monthly inventory of new homes for sale reached a record

of a 12.2-months’supply.With the high inventories,home

Indicators that reached a high point in 2008
Substantial Job Losses in 2008

26 Monthly Labor Review • March 2009

Chart 4. Job losses in manufacturing over four contractions, percent change since total nonfarm employment 

 peak

Percent Percent

2.0

1.0

0.0

–1.0

–2.0

–3.0

–4.0

–5.0

–6.0

–7.0

–8.0

–9.0

–10.0

–11.0

–12.0

–13.0

–14.0

2.0

1.0

0.0

–1.0

–2.0

–3.0

–4.0

–5.0

–6.0

–7.0

–8.0

–9.0

–10.0

–11.0

–12.0

–13.0

–14.0

–5 –4 –3 –2 –1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Number of months after employment peak

values depreciated, further exacerbating job losses in construction and related industries. “American homeowners

will collectively lose more than $2 trillion in home value

by the end of 2008,” and home values dropped 8.4 percent

year over year during the first 3 quarters of 2008, according to real estate Web site Zillow.com.11

Over the year, employment in construction fell by more

than 680,000,the worst 12-month net job loss since 1944.

In percentage terms, employment fell by more than 9

percent—the largest 12-month decline since 1991. Employment losses in construction were concentrated on the

residential side until 2008. Employment in residential

construction has fallen by 800,000 since reaching a peak

at the beginning of 2006.12 Not until February 2008 d

construction employment losses broaden into nonresidential industries, including heavy and civil engineering.

Employment losses in nonresidential construction totaled

270,000 during 2008 and contributed to accelerated losses

in total construction. (See chart 5.)

In comparison to earlier periods of contraction in total

employment,the current contraction produced job lossesin

construction similar to those of the 1981 contraction, until

the fourth quarter of 2008, when job loss in the industry

accelerated. Total job losses in construction now resemble

the losses seen in the 1990 contraction. Job losses during

the 2001 recession were relatively mild. (See chart 6.)

Financial activities.  Employment in construction and financial activities peaked at about the same time, coincident

with the housing bubble. Subprime mortgage issues and

the financial crisis eroded employment even more in the

financial sector.The industry averaged 10,000 jobs lost per

month through 2007 and 13,000 during the first 8 months

of 2008; then losses accelerated to an average of 33,000 in

each of the last 4 months of the year. Considering the job

losses the financial activities industry experienced over the

year,the loss of 233,000 jobs in 2008 was the largest in the

history of the series and the largest percentage loss since

the 12-month period from March 1942 to March 1943.

Compared with the last three contractions in total employment, the current contraction in financial activities rivals no other.In fact, employment in the sector grew during

the 2001 and 1981 employment contractions and didn’t fall

until 5 months into the 1990 recession.(See chart 7.)

Temporary help services. Within the North Ameri

December 2007

February 2001

June 1990

July 1981
Monthly Labor Review • March 2009 27

Chart 5. Residential and nonresidential construction employment, seasonally adjusted, 

 January 2001–December 2008 Residential 

construction

 (thousands)

Nonresidential 

construction

 (thousands)

4,500

4,250

4,000

3,750

3,500

3,500

3,250

3,000

2,750

2,500

Nonresidential 

Residential 

Jan 2001 Jan 2002 Jan 2003 Jan 2004 Jan 2005 Jan 2006 Jan 2007 Jan 2008

Chart 6. Job losses in construction over four contractions, percent change since total nonfarm employment peak

Percent Percent

Number of months after employment peak

–5 –4 –3 –2 –1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

4.0

3.0

2.0

1.0

0.0

–1.0

–2.0

–3.0

–4.0

–5.0

–6.0

–7.0

–8.0

–9.0

–10.0

–11.0

–12.0

–13.0

–14.0

–15.0

4.0

3.0

2.0

1.0

0.0

–1.0

–2.0

–3.0

–4.0

–5.0

–6.0

–7.0

–8.0

–9.0

–10.0

–11.0

–12.0

–13.0

–14.0

–15.0

December 2007

February 2001

June 1990

July 1981
Substantial Job Losses in 2008

28 Monthly Labor Review • March 2009

Industry Classification System (NAICS), temporary help

services is a detailed industry among several making up

the professional and business services major industry.

Employment growth in professional and business services

slowed during 2007, to an average increase of 25,000 jobs

per month from an average of 45,000 jobs per month

during 2006. Employment in the industry peaked in December 2007—coinciding with the peak in total nonfarm

employment—before falling by an average of 63,000 per

month in 2008. Most of the slowdown can be traced to

employment losses in temporary help services—what

many see as a leading indicator of labor demand. Temporary help employment peaked a full year ahead of total

nonfarm employment and had fallen by almost 620,000

by December 2008.

Job losses in temporary help services during the current

contraction were similar to those seen in 2001 until about

10 months into the contraction,when job losses recovered

slightly and employment in the industry stabilized. In

2008, the temporary help services industry continued to

experience job losses at an accelerated pace. Employment

losses in temporary help services during the 1990 contraction were relatively mild, and the industry recovered

within 2 years. (See chart 8.)

Consumer-driven job loss

As job losses in manufacturing, construction, financial activities, and temporary help services accelerated through

2008, consumer-driven industries began to show losses as

well, because of falling consumer confidence, tightened

credit, and less consumption.

Retail trade. Retail employment peaked in Novem

2007, after which employment losses averaged almost

29,000 during the first 8 months of 2008 and then accelerated to more than 74,000 per month toward year’s

end. Declines in consumer spending and falling consumer

confidence broadened retail job cuts: from a concentration in housing and construction-related industries, cuts

spread to almost all retailers. Not only did retailers end

up shedding jobs, but many had to close. Even discount

department stores,which normally fare well during recessions, suffered job losses.

Job losses in retail trade during the current contraction

are similar to those seen during both the 1990 and 2001

 Chart 7. Job losses in finanical activities over four contractions, percent change since total nonfarm employment 

 peak

4.0

3.0

2.0

1.0

0.0

–1.0

–2.0

–3.0

–4.0

Percent Percent

Number of months after employment peak

4.0

3.0

2.0

1.0

0.0

–1.0

–2.0

–3.0

–4.0

–5 –4 –3 –2 –1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

December 2007

February 2001

June 1990

July 1981
Monthly Labor Review • March 2009 29

contractions, except that, during those timeframes, job

losses had slowed about 10 months into the contraction,

whereas losses in 2008 continued to accelerate. Job losses

in retail trade during the 1981 contraction were mild, and

the industry recovered just over 12 months after the start

of the contraction. (See chart 9.)

Leisure and hospitality. Tightened spending also hurt 

leisure and hospitality industry as consumers traveled less

and ate at restaurants less often. Leisure and hospitality employment peaked in December 2007 and fell by a

monthly average of 12,000 jobs during the first 8 months

of 2008; job losses accelerated to an average of 38,000 in

each of the last 4 months of the year. Food services and

drinking places, which showed limited job loss during

the 2001 employment contraction, were responsible for

42 percent of the job losses in leisure and hospitality in

2008.

Of the four contractions examined in this article, the

current one seems to be the only one in which the leisure

and hospitality industry has experienced consistent job

loss. During the previous three such periods, industry job

losses were mild, if they occurred at all, and recovery was

within a year. (See chart 10.)

A bit of job growth

Despite job losses throughout most of the economy, a few

industries were able to post job gains during 2008.

Mining.  Soaring oil and gas prices, along with high

prices for metals, helped push mining employment up,

especially for oil and gas extraction and support activities.

Previously, mining employment had reached a low point

in April 2003; since then, it has risen by 235,000. However, a sharp drop in oil prices toward the end of the year

stalled employment growth in mining.

A comparison of the last three contractions in total employment reveals that the current job increases in mining

rival those of the July 1981 contraction, although within

1 year the 1981 job gains had vanished. During the 1990

and 2001 periods,the industry experienced mild job losses

within a year after the start of the contraction. (See chart

11.)

Health care. Employment in health care continued to expand despite employment losses in most other industri

In fact, on average, job growth in health care was slightly

stronger in 2008 (30,000 jobs per month) and in 2007

 Chart 8. Job losses in temporary help services over three contractions, percent change since total nonfarm 

 employment peak

6.0

4.0

2.0

0.0

–2.0

–4.0

–6.0

–8.0

–10.0

–12.0

–14.0

–16.0

–18.0

–20.0

–22.0

Number of months after employment peak

Percent Percent

–5 –4 –3 –2 –1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

6.0

4.0

2.0

0.0

–2.0

–4.0

–6.0

–8.0

–10.0

–12.0

–14.0

–16.0

–18.0

–20.0

–22.0

December 2007

February 2001

June 1990
Substantial Job Losses in 2008

30 Monthly Labor Review • March 2009

Chart 9. Job losses in retail trade over four contractions, percent change since total nonfarm employment peak

Percent Percent

–5 –4 –3 –2 –1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

3.0

2.0

1.0

0.0

–1.0

–2.0

–3.0

–4.0

Number of months after employment peak

Number of months after employment peak

 Chart 10. Job changes in leisure and hospitality over four contractions, percent change since total nonfarm 

 employment peak

Percent Percent

4.0

3.0

2.0

1.0

0.0

–1.0

–2.0

–3.0

December 2007

February 2001

June 1990

July 1981

3.0

2.0

1.0

0.0

–1.0

–2.0

–3.0

–4.0

4.0

3.0

2.0

1.0

0.0

–1.0

–2.0

–3.0

–5 –4 –3 –2 –1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

December 2007

February 2001

June 1990

July 1981
Monthly Labor Review • March 2009 31

 Chart 11. Job changes in mining over four contractions, percent change since total nonfarm employment peak

Number of months after employment peak

Number of months after employment peak

 Chart 12. Job gains in health and education over four contractions, percent change since total nonfarm 

 employment peak

–5 –4 –3 –2 –1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

9.0

8.0

7.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0

–1.0

–2.0

–3.0

10.0

8.0

6.0

4.0

2.0

0.0

–2.0

–4.0

–6.0

–8.0

–10.0

–12.0

–14.0

–16.0

–18.0

–20.0

–22.0

–24.0

Percent Percent

Percent Percent

10.0

8.0

6.0

4.0

2.0

0.0

–2.0

–4.0

–6.0

–8.0

–10.0

–12.0

–14.0

–16.0

–18.0

–20.0

–22.0

–24.0

–5 –4 –3 –2 –1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

December 2007

February 2001

June 1990

July 1981

December 2007

February 2001

June 1990

July 1981

9.0

8.0

7.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0

–1.0

–2.0

–3.0
Substantial Job Losses in 2008

32 Monthly Labor Review • March 2009

Table 3. Average monthly change in employment, selected industries, seasonally adjusted, 2006–08

 

 

 Industry September 2008– 2006 2007 2008 January 2008–

December 2008 August 2008

Total nonfarm .......................................................................... 178 96 –257 –137 –495

Total private.............................................................................. 161 72 –270 –161 –489

 

Mining and logging............................................................... 5 3 4 6 1

Mining..................................................................................... 5 3 4 6 1

Construction ............................................................................ 15 –16 –57 –43 –84

Construction of buildings................................................ 2 –5 –14 –11 –19

Residential building ....................................................... 0 –8 –11 –10 –12

Nonresidential building................................................ 3 3 –3 –1 –7

Heavy and civil engineering construction................. 3 0 –6 –5 –8

Specialty trade contractors............................................. 9 –11 –37 –27 –57

Residential specialty trade contractors................... –5 –15 –24 –21 –31

Nonresidential specialty trade contractors........... 14 4 –13 –6 –26

Manufacturing......................................................................... –14 –22 –73 –49 –121

Durable goods..................................................................... –4 –16 –54 –36 –89

Wood products................................................................ –3 –3 –7 –6 –9

Nonmetallic mineral products................................... 0 –2 –4 –3 –6

Primary metals................................................................. 0 –1 –3 –1 –5

Fabricated metal products........................................... 3 0 –8 –4 –17

Machinery.......................................................................... 1 0 –3 0 –9

Electrical equipment and appliances...................... 0 0 –1 0 –3

Transportation equipment.......................................... –2 –5 –16 –13 –21

Motor vehicles and parts.......................................... –4 –7 –15 –13 –19

Furniture and related products.................................. –2 –2 –6 –5 –9

Nondurable goods............................................................. –10 –5 –19 –13 –33

Food manufacturing...................................................... –1 2 –1 –1 –1

Textile mills........................................................................ –2 –2 –2 –2 –3

Textile product mills....................................................... –1 –1 –1 –1 –1

Apparel ............................................................................... –1 –1 –2 –1 –4

Paper and paper products........................................... –1 –1 –2 –1 –3

Printing and related support activities.................... 0 –2 –4 –3 –6

Plastics and rubber products...................................... –4 0 –5 –2 –10

Wholesale trade...................................................................... 12 6 –16 –11 –26

Retail trade................................................................................ 3 14 –44 –29 –74

Motor vehicle and parts dealers.................................... 0 –1 –13 –9 –22

Furniture and home furnishings stores...................... 1 –1 –5 –4 –7

Building material and garden supply stores............. 1 –3 –4 –4 –5

Transportation and warehousing..................................... 10 3 –14 –6 –29

Utilities....................................................................................... 0 1 1 0 1

Information............................................................................... –2 –1 –7 –4 –13

Financial activities.................................................................. 9 –10 –19 –13 –33

Credit intermediation and related activities............. 3 –12 –9 –9 –11

Securities, commodity contracts, and investment. 3 2 –2 0 –5

Real estate ............................................................................. 1 0 –3 –2 –6

Professional and business services.................................. 45 25 –63 –48 –93

Professional and technical services.............................. 27 27 –2 2 –9

Management of companies and enterprises............ 5 6 –3 –1 –6

Administrative and waste services............................... 14 –8 –58 –48 –78

Temporary help services............................................... 2 –7 –44 –35 –61

Education and health services........................................... 39 43 43 48 33

Educational services.......................................................... 4 5 7 13 –5

Health care............................................................................ 27 29 30 30 30

Social assistance.................................................................. 8 9 5 4 7

Leisure and hospitality ......................................................... 33 21 –21 –12 –38

Food services and drinking places............................... 25 16 –9 –2 –21

Other services.......................................................................... 5 4 –3 2 –13

Government............................................................................. 17 24 14 23 –6

 

Average monthly change in employment (thousands)
Monthly Labor Review • March 2009 33

(29,000 jobs per month) than during 2006 (27,000 jobs

per month).

A comparison of job increases in health and educational

services across all four contractions shows that growth

currently is weaker than in 1990 and 2001, but slightly

better than in 1981. (See chart 12.)

Severe job losses during 2008

Not only were nonfarm employment lossesin 2008 substantial enough to rival historic job losses, but the employment

losses in construction, manufacturing, financial activities,

and temporary help services that characterized 2007 broadened and accelerated toward the end of 2008.Employment

in consumer-driven industriessuch asretail trade and leisure

and hospitality began to fall during the year, and the losses

accelerated during the final part of the year. Of the major

industries, only mining, education, and health care saw employment grow throughout 2008.(See table 3.)

Notes

1The Current Employment Statistics (CES) survey is a monthly survey

of about 150,000 nonfarm business and government agenciesrepresenting approximately 390,000 individual worksites. For more information

on the program’s concepts and methodology, see “Technical Notes to

Establishment Data Published in Employment and Earnings,”in Economic News Release: Employment Situation (Bureau of Labor Statistics,

Feb. 6, 2009), on the Internet at www.bls.gov/web/empsit.supp.toc.

htm#technote (visited Feb. 6, 2009). CES data are presented in Current 

Employment Statistics—CES (National) (Bureau of Labor Statistics, no

date), on the Internet at www.bls.gov/ces (visited Feb. 6, 2009). T

CES data used in this article are seasonally adjusted unless otherwise

noted.The beginnings and endings of recessions are determined by the

National Bureau of Economic Research (NBER). (See details at www.

nber.org/cycles/dec2008.html (visited Jan. 30, 2009).)

2 Total nonfarm employment cycles can, but do not necessarily, match

business cycle peaks and troughs as determined by the NBER.

3 A coincident index is an index that, more often than not, correlates

directly with the state of the economy.

4 Robyn Richards, “Payroll employment in 2007: job growth slows,”

Monthly Labor Review, March 2008, pp. 19–31; on the Internet at

www.bls.gov/opub/mlr/2008/03/art2full.pdf (visited Feb. 6, 2009).

5 Tami Lehby, “Foreclosures soar 76 percent to record 1.35 million,” CNNMoney.com, Dec. 5, 2008, on the Internet at money.

com/2008/12/05/news/economy/mortgage_delinquencies/index.

htm (visited Feb. 6, 2009). Others share this view.

6 See Emily Maltby,“Credit crunch hits small businesses,” Senior Loan 

Officer Opinion Survey on Bank Lending Practices, July 2008; released

by the Federal Reserve System in August 2008 and on the Internet at

money.cnn.com/2008/09/15/smallbusiness/credit_crunch_hits_

smallbiz.smb/index.htm (last updated Sept. 18, 2008, and visited Feb.

6, 2009).

7 See Chris Isidore,“Fed slashes key rate to near zero,”CNNMoney.com,

Dec. 16, 2008, on the Internet at money.cnn.com/2008/12/16/news/

economy/fed_decision/index.htm (visited Feb. 6, 2009).

8 Mary Ellen Lloyd, “Retail Insolvencies Expected to Rise in New

Year,” Wall Street Journal, Dec. 3, 2008; on the Internet at online.wsj.

com/article/SB122827939719775387.html (visited Feb. 6, 2009).

9 Judy Keen and Paul Overberg, “Gas prices rattle Americans,”

USA Today, May 9, 2008, on the Internet at www.usatoday.com/

money/industries/energy/2008-05-08-gasprices_N.htm (visited

Feb. 6, 2009).

10 The Institute covers such indicators as new orders, production, employment, inventories, prices, and export and import orders. A reading below 50 indicates contraction in the manufacturing sector, and

December marked the sector’s 11th straight month of loss. (See the

organization’s Web site on the Internet at www.ism.ws.)

11Les Cristie,“U.S. homes lose $2 trillion in value in ’08,” CNNMoney, Dec. 16, 2008, on the Internet at money.cnn.com/2008/12/15/

real_estate/underwater_borrowers_near_12million/index.htm

(visited Feb. 6, 2009).

12 Residential construction is the sum of residential building (NAICS

2361) and residential specialty trade contractors (NAICS 238001). Nonresidential construction is the sum of heavy and civil construction (NAICS 237), nonresidential building construction (NAICS 2362), and nonresidential specialty trade contractors (NAICS 238002).