Follow us:

Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

March 6, 2009 at 10:10 AM

Behind the jobless report, signs of a long recession

Top of the News: Last month, I wrote that jobs — and job retention by states and regions — would soon eclipse the housing market as the epicenter of concern in this recession. Today’s Labor Department report that non-farm payrolls fell 651,000 in the short month of February, pushing unemployment to 8.1 percent, was actually in line with the expectations of chastened analysts. It’s what’s behind the numbers that’s more unsettling.

The department revised its numbers of job losses for December and January to reflect much more severe declines — the worst in 60 years. The depth and breadth of the reductions show how global and cross-sector the downturn is being felt. Some 4.4 million net jobs have been lost since December 2007, and the numbers of long-term unemployed are also growing. And we’re not even counting the “underemployed” or those who have given up looking (that would pull the real employment rate up to 14.8 percent, vs. 13.9 percent in January).

Even before the revised numbers, Christopher Portman, a senior economist at Oxford Economics wrote on Knowledge@Wharton, “In terms of the global economy, 2009 will be the worst year since World War II and even since the 1930s.” With so many sick sectors, with so much bad debt, with a fundamental “reset” facing the economy — this downturn has the potential to be long, especially if time and treasure is spent trying to revive the unsustainable (zombie banks, call your office). All indicators point to deeper joblessness to come in Washington state, but we’re in better shape than most right now.

The Back Story: At the risk of crisis fatigue, I’ll call your attention to the musings of James Kwak, a software entrepreneur and writer on the econ blog Baseline Scenario. He rightly raises the undertold story of the danger facing retirees as asset prices have fallen, 401(k)s have been decimated, many pension funds are underfunded — and many older households don’t even have retirement accounts. Kwak writes, “Our retirement “system” has four main legs: Medicare, Social Security, corporate or government defined-benefit pensions, and private saving (IRAs, 401(k)s, etc.). Right now it looks like Medicare and Social Security are the stronger legs.”

Today’s Econ Haiku:

Just what Boeing needs

A Wichita tornado

As workers vote no

Comments | More in Jobs/Unemployment, Retirement

COMMENTS

No personal attacks or insults, no hate speech, no profanity. Please keep the conversation civil and help us moderate this thread by reporting any abuse. See our Commenting FAQ.



The opinions expressed in reader comments are those of the author only, and do not reflect the opinions of The Seattle Times.


The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►
The Seattle Times

To keep reading, you need a subscription upgrade.

We hope you have enjoyed your complimentary access. For unlimited seattletimes.com access, please upgrade your digital subscription.

Call customer service at 1.800.542.0820 for assistance with your upgrade or questions about your subscriber status.

The Seattle Times

To keep reading, you need a subscription.

We hope you have enjoyed your complimentary access. Subscribe now for unlimited access!

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Activate Subscriber Account ►