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Opinions and views from expert CFOZone members.


Aug 31
2010

Job losses still outpace gains, but the margin is shrinking

Posted by Karen1 in unemploymentDOLBLS

Karen1

Recently released data from the DOL's Bureau of Labor Statistics shows just how the overall unemployment numbers break down. The Business Employment Dynamics slices and dices employment gains and losses from September through December 2009, tallying changes by industry sector, company size and region of the country.
 
Several numbers stand out. First, while job losses outpaced job gains throughout 2009, the difference between the two numbers declined dramatically. In the first quarter of the year, net job losses totaled 2.74 million. That dropped to 193,000 by the fourth quarter.

Similarly, the numbers of net job losses by industry also declined throughout 2009, with a few sectors actually showing gains.

The net number of jobs considered professional and business services, for instance, dropped by 558,000 in the first quarter of 2009, but rose by 189,000 in the fourth quarter. It's worth pointing out that this sector includes temporary staffing services.

Education and health services jobs grew throughout the year, spiking in the fourth quarter. The sector added 8,000 jobs in the first three months of 2009, and another 157,000 in the fourth quarter.
 
A few states saw job growth by the end of the year. The lucky ones were Arkansas, California, Washington DC, Kentucky, Nevada, New York, North Dakota, Tennessee and Vermont.
 
When it comes to employment changes by the size of the firm, the most dramatic drops in job losses occurred in firms of 1,000 or more employees. During the first quarter, these companies lost 681,000. By the fourth quarter, that number had slowed to 20,000.

Somewhat surprisingly, job losses at the smallest firms-those with up to four employees-also dropped significantly. These companies shed 245,000 in the first quarter of 2009, versus just 3,000 in the last. In contrast, firms with 10-to-49 employees dropped 560,000 workers in the first quarter and 127,000 in the last.
Similarly, by the end of the year, the number of job gains due to newly opened businesses outpaced job losses due to companies closing their doors. A net loss of jobs of nearly 300,000 in the first quarter of 2009 swung to a gain of 31,000 by year end.

Overall, the numbers are moving in the right direction. While hiring is far from robust, companies are not laying off employees in the numbers they did earlier in 2009. And, new businesses appear to be compensating - at least in part - for businesses that are closing or laying off employees.

 

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