In December 2007 the economy was on the precipice of the Great Recession. The severity and swiftness of job losses was extraordinary. As losses mounted I wrote a post in 2011, remarking at the time that it was impossible to imagine how long it would take to regain all the jobs that vanished. Well, we now have the answer — the destruction and recovery took well over six years.
Job growth is depicted in Chart 1. Each line represents a recession and starts at the onset of recession and traces monthly job growth. I’ve included trends for the last three recessions; the current trajectory for the U.S. and California and the previous two recessions for California.
Evident from the chart — the shedding of jobs over the Great Recession was rapid and deep — particularly in California, as the climb out for both the U.S. (dotted red line) and California (red line) took much longer. From the beginning of the downturn through its trough, job losses in the U.S. totaled about 8.7 million or 6.3% of all jobs; 15% of those were in California, which represented job losses of 1.3 million or 8.3% in the state. This shedding of U.S. jobs was historical given that a total of 3.1% of all jobs were lost in the severe early-1980s double-dip recessions (not shown)–and as compared to the 1990 (blue line) and 2001 (green line) recessions in the Golden State.
The good news is that beginning in October 2010, the U.S. has experienced 65 consecutive months of job gains with a monthly average of 203,000. Consistent positive gains in California started in July 2011 and continued until a blip in January 2016 when a loss of 4,000 was logged—monthly gains have averaged just fewer than 35,000 in the state. As Chart 1 indicates, job growth in California, on a percentage basis, has outpaced gains for the U.S. over the past few years.
As of February 2016, total job growth was up 3.7% (5.1 million) in the U.S. and 5.4% (838,000) in California compared to December 2007. However, it should be noted that the 3.7% and 5.4% job growth figures for the U.S. and California, respectively, have happened over an eight-year period—which is weak in the context of a growing labor force.
To find out more about labor market trends post-Great-Recession for the U.S. and California see my newly released CWED issue brief (pdf). In this brief I contextualize many economic indicators (job growth by sector, unemployment, long-term unemployment, EPOPs, wages, and incomes) as the economy enters its ninth year since the onset of the Great Recession and approaches the seventh year of official recovery (June 2016).