The U.S. economy has been shedding jobs consistently on a month-to-month basis since January 2008. From January to May of this year, job losses continued, but on a declining basis. Unfortunately, the recent record of relative progress was sidetracked in June, according to the latest labor market report from the U.S. Bureau of Labor Statistics. In June, the employment drop was -467,000, which was significantly higher than the previous month's -322,000 figure. In an effort to find encouragement wherever one can, June's negative figure was less than in any other month this year except for May.

More than 80% of Job Losses in Four Sub-categories

The unemployment rate moved up slightly to 9.5% from 9.4% in May, as the labor force contracted with more potential workers becoming discouraged and no longer looking for a job. More than 80% of the total job loss figure (-467,000) in the month came in four major sub-categories of employment − manufacturing (-136,000 jobs), professional and business service (-118,000), construction (-79,000) and government (-52,000).(story continued below)

U.S. : Month-to-Month Total Job Creation

Over the past 20 years, the U.S. economy has generated, on average, 120,000 new jobs per month or 1.5 million new jobs per year.

Data Source: U.S. Bureau of Labor Statistics (Department of Labor)/Chart: Reed Construction Data - CanaData.

Manufacturing Dragged Down by Autos

The year-over-year decline for manufacturing (-12.2%) was much higher than for total employment (-4.1%). It was expected that there would be further problems in the auto sector. Chrysler and General Motors slipping into bankruptcy protection was going to harm assembly operations and reduce the output of the parts makers. Year-over-year employment in motor vehicles and parts manufacturing was down a stunning -30.4%.

The total number of jobs lost in auto and parts manufacturing since the beginning of 2006, which was the end of the most recent period of employment stability in this sector, has been 500,000. Auto sector jobs started to fall away at the same time as housing starts began drifting downwards. By the way, the decline in auto dealership jobs probably still has a ways to go, since the year-over-year decline currently stands at only -14.0%.

Architectural and Engineering Services

Employment in professional and business services tells an interesting story. Legal services (-2.9% year over year) and accounting services (-2.0%) employment are holding up relatively well. Architectural and engineering services (-7.9%) are in decline much like construction as a whole. The surge from infrastructure spending is clearly not making its way to the front line yet. But what is most notable is the decline in administrative services employment, where one sub-category — temporary help services — is particularly feeling the effects of the recession with a -27% year-over-year change in employment.

Construction Job Losses

The year-over-year manufacturing jobs decline (-12.2%) has only been exceeded by the construction sector (-13.7%). Ongoing weakness in residential construction in the form of minimal housing starts has accounted for most of the employment woes, but in the latest month, non-residential buildings (-12,000 jobs) and heavy and civil engineering (-16,000) also contributed on-site work cuts. Job losses by specialty trade contractors were also high (-45,000) and this was about equally split between residential and non-residential.

Public Sector Employment

Recessionary tax revenue drops, balanced budget mandates and gridlock over financing decisions in some key states (e.g., California) are forcing job cuts on state and municipal governments. As a result, public sector employment is starting to show the effects with year-over-year job growth falling to only +0.1% in June. Too-optimistic estimates of employment in this job category, and even more so in the area of health and education, are probably understating the overall decline in jobs that is taking place.

Total Job Loss Figure in this Recession

The total job loss figure for the United States in this recession now stands at 6.5 million. This would climb to nearly nine million if only full-time jobs were considered. The overall employment shortfall has been partially rescued by more than two million new part-time jobs. However, part-time work does not contribute to the economy to the same degree as full-time work, which is generally higher-paying with better benefits.

Latest U.S. Employment Picture by Industry –
Levels and Year-Over-Year Percent Changes

U.S. Total Employment – Level (Based on seasonally adjusted data)

U.S. Total Employment – % Change (Based on seasonally adjusted data)

U.S. Construction Employment – Level (Based on seasonally adjusted data)

U.S. Construction Employment – % Change (Based on seasonally adjusted data)

U.S. Manufacturing Employment – Level (Based on seasonally adjusted data)

U.S. Manufacturing Employment – % Change (Based on seasonally adjusted data)

U.S. Service-providing Employment – Level (Based on seasonally adjusted data)

U.S. Service-providing Employment – % Change (Based on seasonally adjusted data)

U.S. Retail Trade Employment – Level (Based on seasonally adjusted data)

U.S. Retail Trade Employment – % Change (Based on seasonally adjusted data)

U.S. Transportation and Warehouse Employment – Level (Based on seasonally adjusted data)

Includes air, rail, water, truck, transit and pipeline transportation, plus warehousing and storage.

U.S. Transportation and Warehouse Employment – % Change (Based on seasonally adjusted data)

U.S. Financial Activities Employment – Level (Based on seasonally adjusted data)

Includes banking, finance and insurance firms, plus real estate and leasing activities.

U.S. Financial Activities Employment – % Change (Based on seasonally adjusted data)

U.S. Professional and Business Services Employment – Level (Based on seasonally adjusted data)

Includes legal, accounting, architectural, management and employment services, plus computer system design work.

U.S. Professional and Business Services Employment – % Change (Based on seasonally adjusted data)

U.S. Information Services Employment – Level (Based on seasonally adjusted data)

Includes publishing, motion picture and sound recording, broadcasting, telecommunications and Internet business.

U.S. Information Services Employment – % Change (Based on seasonally adjusted data)

U.S. Education and Health Employment – Level (Based on seasonally adjusted data)

U.S. Education and Health Employment – % Change (Based on seasonally adjusted data)

U.S. Leisure and Hospitality Employment – Level (Based on seasonally adjusted data)

U.S. Leisure and Hospitality Employment – % Change (Based on seasonally adjusted data)

U.S. Government Employment – Level (Based on seasonally adjusted data)

U.S. Government Employment – % Change (Based on seasonally adjusted data)

Data source: Payroll Survey, Bureau of Labor Statistics (U.S. Department of Labor).
Charts: Reed Construction Data - CanaData.