The current recovery is the second slowest on record since 1961 – continuing a trend that began in 1991 of weak growth in both jobs and GDP. In the last three recoveries, neither GDP nor employment “roared back” as was typical after earlier downturns.
In the current recovery, some industries are doing better, others worse. “When looking across industries, the current recovery is showing some unique trends,” says Gad Levanon, Associate Director of Macroeconomic Research at The Conference Board, and author of the report. “For example, employment in construction, finance and state/local government is not only declining, but declining much faster than in any other recovery since 1960. The decline in these industries is a result of forces that go beyond the ups and downs we see in typical recessions, and a strong bounce back is unlikely in the near future.” Since the end of recession, total employment in construction, finance and state/local government declined by 1.06 million jobs, while the rest of the economy added only 1.3 million jobs.
The Conference Board report includes a breakdown by industry, including a listing of job recovery rates by sector and over time. For example:
- Hardest Hit: The number of jobs in construction (-8.1 percent), finance (-1.8 percent), and state and local government (-1.0 and -2.6 percent respectively) continued to decline in the 21 months after the end of the recession.
- Disappointing: Healthcare and leisure and hospitality jobs have recovered, but at a rate slower than any since 1960.
- Doing OK: Manufacturing suffered less job loss than in recent recessions, and in the last 12 months, manufacturing employment has grown at the highest rate since the 1990s.
- Shrinking Government: The growth in federal government jobs during the recovery has been historically high (38,000), but not enough to offset the unprecedented losses in state and local government jobs (-429,000).
In the near-term, employment growth will continue to be slow. The housing downturn, high oil and commodity prices, government austerity measures and limited consumer spending will prevent GDP growth from being more robust. Unemployment is likely to remain above 8 percent through 2012. The Conference Board forecasts GDP to grow at about 2.5 percent in 2011 and 2012, much lower than the rate of 3.5 to 4 percent typically reached during expansions.
Adds Levanon: “Longer-term prospects are more promising, however. In the last six months, employment outside of construction, finance and state and local government has already been growing faster than nearly any other six-month period in the last decade. Once constraints in these hard-hit sectors loosen, overall job recovery is likely to pick up pace.”