According to the BLS, the height of job losses in 2009 peaked in January (741,000 job losses), with August accounting for the lowest rate of job losses this year (201,000). Unfortunately, September job losses have taken a turn for the worse, increasing to 263,000 and refuting the trend that job losses are on a continuous downward trend that will eventually lead to positive job growth in the near future.
(image provided by http://blogs.fxstreet.com/fxbootcamp/)
So, the real question regarding the September data---are the job losses an anomaly or trend? Is the economy in a V or W? Will the rate of job losses increase in October, or will the rate of job losses experience a downward trend next month?
Although job losses dropped to 201,000 in August, September spiked back up again, leading us to believe the economy is still very unstable and could go either way. If September is in fact an anomaly, not the trend, it is possible that we could see a downward trend of job losses throughout the remaining months of this 2009, with October-December accounting for monthly job losses in the low 200,000’s and high 100,000’s.
Showing some insight into this trend, the Q2 2009 Beyond.com Career Trend Report indicated that job losses were far from over and the employment rate would continue to rise based on the poll results that over 65% of professionals said their company was continuing to cut staff.
Although most industries experienced job losses in September 2009, many sectors of employment, such as Construction and Manufacturing, posted job losses at a slower than average rate when compared to the monthly job losses over the previous few months.
However, one of the most worrisome trends reported in the September 2009 BLS report was that Retail was continuing to bleed jobs a higher than average rate when compared to the previous few months. Many economic experts have reported the service industry as one of the main sources of US employment, which is why it is such a negative sign that the Retail sector experienced 10,000 more job losses in September than the average job loss rate from April-September 2009.
Luckily, there is still hope! Healthcare is continuing to add jobs to the economy at a steady pace. Not only did the Healthcare sector create 19,000 jobs in September 2009, but the industry has continued to maintain its strength, adding jobs at a rate comparable to the average monthly gain during 2009. (22,000).
Also, based on Beyond.com’s Q2 data (we are still tabulating our Q3 report) small businesses continue to drive the majority of jobs openings today (over 50%), creating hope for new employment opportunities in the future. Small businesses have the ability to react more quickly to economic trends than larger companies, allowing small businesses to lead the way out of the recession.
One thing is for sure, if job losses do not stabilize soon, it might be time to batten down the hatches because 2010 could get really ugly.
