Friday morning’s news that there was no job growth in the month of August sent disappointment throughout the country, and stoked fears that another recession may be around the corner. The meager 17,000 private sector jobs added were offset by an equal loss of public sector workers, as state and local governments continued to make cutbacks.
A closer look at the CES data from the BLS shows that the recovery is indeed losing momentum, both nationally and in West Virginia. First let’s look at the national picture.
The above chart shows U.S. nonfarm employment (seasonally adjusted) from January 2007 to July 2011. The red lines indicate the highest and lowest points for employment in that time period, and serve as a useful indicator of the start of the recession and the beginning of the recovery.
Employment in the U.S. peaked in January 2008. In the 12 months prior, employment grew at an average monthly rate of 0.05%. After the peak, employment finally bottomed out in February of 2010. During that time, employment fell at an average monthly rate of -0.26%.
Since bottoming out, U.S. employment has grown at an average monthly rate of 0.09% (from Feb 2010 to July 2011), a higher rate than in the 12 months before the recession. And in the first part of 2011, that growth seemed to be building momentum. Between January and April of 2011, the average monthly rate of growth pick up steam, reaching 0.16%.
Unfortunately, that momentum has been lost, as the average monthly rate of growth slowed to 0.05% from April to July. And as the latest report shows, it won’t be pretty for August.
It’s a similar tale for West Virginia as well. Again, the below chart shows WV nonfarm employment (seasonally adjusted) from January 2007 to July 2011, with the red lines indicating the highest and lowest points for employment in that time period.
West Virginia’s employment peaked in February of 2008, and reached its bottom in February of 2010. In the year leading up to the recession, West Virginia’s employment grew at an average monthly rate of 0.08%, and during the decline fell at an average monthly rate of -0.14%.
Since employment bottomed out in February 2010, employment in West Virginia has grown at a monthly rate of 0.09%; like the U.S., better growth than the 12 months before the recession. And like the U.S., growth in West Virginia began to speed up in the beginning of 2011, as the average monthly growth rate increased to 0.26% between January and April.
However, just like the national picture, that momentum has been quickly lost, as the average monthly rate of growth turned negative between April and July, at -0.16%.
At this point it is pretty clear that the recovery has stalled. Perhaps instead of a super-committee in Congress focused on budget cuts (which as we can see across the country, kills jobs), we can get one that focuses on job creation.