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Payroll employment turns the corner in 2010
John P. Eddlemon
John P. Eddlemon is an economist in the Division of Current Employment Statistics, Office of Employment and Unemployment Statistics, Bureau of Labor Statistics. Email: eddlemon.john@bls.gov
Nonfarm payroll employment reached a low point in February 2010, and modest job growth continued throughout the rest of the year.
After falling by 8.8 million between an employment peak in January 2008 and a trough in February 2010, nonfarm employment, as measured by the Current Employment Statistics (CES) survey, increased by 1,014,000 in the last 10 months of the year.1 (See chart 1.) The hiring and layoff of temporary, intermittent workers for the 2010 Census had a large impact on total nonfarm employment for much of the year. However, by November, the effect had been largely offset.2 For the remainder of this article, “nonfarm employment” will refer to total nonfarm employment, excluding temporary, intermittent 2010 Census workers. Following job losses in January and February, nonfarm employment rose for the remainder of the year. Job growth was strongest in April and October, and job gains averaged 105,000 per month after the employment trough in February. (See chart 2.)
Historically, CES employment growth has tended to lag the end of a recession. (See table 1.) The most recent recession lasted from December 2007 through June 2009, but employment continued to fall through February 2010.3 The lag between the end of the business cycle and the trough in nonfarm employment was shorter than it was after the previous recession, but longer than the historical average. A comparison of growth 10 months after troughs in employment shows that the employment recovery which began in February 2010 was weaker than growth in previous recoveries. Through December 2010, employment increased 0.8 percent from its low point. Over the past four employment recoveries, average employment growth from the low point was 1.9 percent; only the employment recovery that began in May 1991 was weaker. (See chart 3.)
1 The Current Employment Statistics (CES) program is a monthly survey of about 140,000 businesses and government agencies representing approximately 440,000 individual worksites. For more information on the program’s concepts and methodology, see “Technical Notes to Establishment Data Published in Employment and Earnings” (U.S. Bureau of Labor Statistics, Mar. 4, 2011), on the Internet at www.bls.gov/web/empsit.supp.toc.htm#technote (visited Jan. 11, 2011). To access CES data, see “Current Employment Statistics – CES (National)” (U.S. Bureau of Labor Statistics, no date), on the Internet at www.bls.gov/ces (visited Jan. 11, 2011). The CES data used in this article are seasonally adjusted unless otherwise noted.
2 For an overview of the impact of census workers on nonfarm employment in 2010, see Emily Richards, “The 2010 Census: the employment impact of counting the Nation,” this issue, pp. 33–38.
3 Recessions are identified by the National Bureau of Economic Research (NBER), according to which the most recent recession began in December 2007 and ended in June 2009. The previous two recessions were from March 2001 to November 2001 and from July 1990 to March 1991. For a complete list of business cycle dates, see “U.S. Business Cycle Expansions and Contractions” (Cambridge, MA, National Bureau of Economic Research, Sept. 20, 2010), on the Internet at www.nber.org/cycles/cyclesmain.html (visited Mar. 11, 2011).
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