Recession job losses: Worse than first thought

By Chris Isidore, senior writer


NEW YORK (CNNMoney.com) -- As bad as job losses were during the recession, we're about to find out that things were even worse.

The government currently estimates that 2.2 million jobs were lost from April of 2009 through March of this year, a significant portion of the 7.8 million jobs lost since the start of 2008.

But in a little-noticed note at the bottom of September's jobs report, the Labor Department said it now appears there were 366,000 additional jobs lost during the 12 months that ended in March, a revision that is not yet included in the official numbers.

That revision isn't as bad as last year's -- when the Labor Department said that an additional 902,000 jobs were lost. But it is still the second largest downward adjustment in nearly 20 years.

The final revision won't be announced until February, but the Labor Department gives a preview in early October of what it is expecting.

This year's large revision is a sign of the difficulty the Labor Department has estimating the number of jobs lost and created during the severe economic upheaval of recent years.

"Around turning points, the revisions tend to be larger," said Lakshman Achuthan, managing director of Economic Cycle Research Institute. "At the bottom of the cycle, they tend to underestimate the job losses."

The government's closely followed monthly jobs report is based primarily on a survey of employers. But the Labor Department has trouble estimating employees at newly opened businesses, as well as figuring out how many jobs were lost at businesses that close. So it uses a model for that part of the estimate.

During the 12-month period that ended in March, that so-called birth-death adjustment added 336,000 jobs to overall total payrolls.

The birth death adjustment also resulted in an estimated 682,000 additional jobs in the six months since March, although unlike the widely-reported monthly job readings, that gain is not seasonally adjusted. Still it is significant, accounting for more then 40% of the job gains reported since the spring.

"The birth-death model isn't working," said Robert Brusca of FAO Economics. "As businesses are having trouble getting credit, it's not surprising." To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 18,081.81 57.64 0.32%
Nasdaq 4,786.71 21.29 0.45%
S&P 500 2,087.05 4.88 0.23%
Treasuries 2.29 0.03 1.51%
Data as of 11:04am ET
Company Price Change % Change
Bank of America Corp... 18.04 0.12 0.64%
Gilead Sciences Inc 92.34 2.89 3.23%
General Electric Co 25.71 -0.17 -0.66%
Cisco Systems Inc 28.57 0.32 1.13%
Apple Inc 112.22 -0.32 -0.28%
Data as of 10:50am ET

Sections

JetBlue is offering to fly police to New York for the funeral of slain NYPD officers and is working to have the family of one of the officers flown in from overseas. More

Many Americans are buying more gifts -- and more expensive gifts -- for Christmas. That's squeezing some in the middle class. More

According to data from Google Trends and GrubHub, Chinese food remains the most popular type of food order on Christmas. More

If you're looking to sell your holiday gift cards for cold hard cash... there's an app for that. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.