The economy began growing in , and has averaged 2. GDP rose at a 4. The latter figure exceeds the average annual growth since the start of the recovery by 0. The pace of monthly job losses slowed dramatically soon after President Obama and Congress enacted the Recovery Act in February The trend in job growth in was obscured by the rapid ramp-up and subsequent decline in government hiring for the Census, but private employers added Total employment private plus government averaged , a month over that period, as federal, state, and local government were net job losers.
Total nonfarm employment rose by , jobs in August. Private employment rose by , in August, federal government employment did not change, state employment fell by 1,, and local employment fell by 2, This suggests that the output gap between actual and potential GDP, which was manifested in excess unemployment and underemployment and idle productive capacity among businesses, has closed.
Employers began to add jobs in Progress erasing the jobs deficit was slow for some time, but the economy has now recovered the 8. Nonfarm payroll employment was 7. Surpassing the pre-recession peak was a milestone on the way to a full jobs recovery, but population growth over the past several years means the potential labor force is larger than it was then. Job creation has averaged , a month over the past 12 months and , over the past three months.
The unemployment rate rose far higher than in the previous two recessions and far faster than though not quite as high as in the deep recession.
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Technically, the recession that began in December ended in June as the economy began growing again, but the unemployment rate did not fall to 5. The unemployment rate has been under 4. The relatively modest pace of job growth in the first years of the recovery kept the unemployment rate high long after the end of the recession. The suit is settled in July 31, - Undergoes surgery to remove a tumor related to the cancer. April 1, - Apple celebrates its 30th birthday. January 9, - Jobs unveils the iPhone at the Macworld conference.
June 27, - A class action suit is filed against Jobs and several members of the Apple's board of directors, claiming that they had participated in the backdating of stock option grants. In , Apple was forced to restate its financial results after acknowledging that an internal investigation had revealed irregularities in its stock option grants between and January 5, - Writes an open letter to the public dismissing rumors about his health, claiming that his weight loss in the past year is due to a "hormone imbalance.
January 14, - Announces he will take a medical leave of absence until the end of June Jobs gives no details on his health issues other than that they are "more complex" than originally thought. June 29, - Apple spokesman Steve Dowling announces that Jobs has returned to work. January 27, - Jobs introduces the iPad.
State and local government-related employment, experiencing its first decline in this business cycle, accounted for the remainder of the decrease. Meanwhile, export-related employment improved, while investment-related employment remained essentially flat. Employment and spending related to the federal government peaked in , supported by the employment increase with the administration of the Census see figures 7—9 and tables 2—3.
In total, the number of jobs tied to consumer demand declined by 3. By , PCE-related employment stood at levels last seen in The recession had a disproportionate impact on goods-producing industries: Services accounted for the remaining The total economy experienced a net decline of 7. This represents a 5. After federal government—related employment increases are excluded, a total 8. PCE-related employment accounted for over a third of this decline— Because of its cyclical nature, investment-related employment experienced much larger and more rapid declines than all other sectors of the economy: Many of those jobs were related to the construction industry.
The remainder of the decline between and was in export-related employment 4. In consumer spending grew 2. The 3-year journey back to spending levels was the slowest recovery from recession since World War II. In overall employment increased by 1. Federal government—related employment began to decline from its peak, while export-related employment reached levels. Declining government-related employment at the federal, state, and local levels, as well as weak investment-related employment growth, were the primary causes of low employment growth in see figures 8—9 and table 3. In consumer spending and its related employment expanded slower than in , as the unemployment rate remained elevated around 8 percent in the United States and the Eurozone slipped into another recession.
In PCE-related employment finally recovered recessionary losses see figure 8. Because the time series of employment relating to consumption only extends back to , the recovery from the latest recession can only be compared with the recession. In the recession, PCE-related employment took 3 years to recover to highs, and total employment took 4 years to recover. In the most recent recession, PCE-related employment recovered in 5 years, while total employment required 7. The quicker recovery of PCE-related employment in comparison with the overall economy reflects the relatively stability of consumption during the business cycle, the strong performance of some of its subsectors see next section , and the negative toll of low investment spending on broader economic recovery in the latest recession.
In contrast to PCE-related employment, total employment expanded faster in than in as investment spending began to show stronger recovery see figure 9 —nonetheless, the overall employment growth rate remained lower than rates typically seen following recessions. In addition to slow consumer-related employment growth, declining government-related employment and diminished export-related growth all hindered overall job growth in Total employment stood 3.
Consumer spending and U.S. employment from the 2007–2009 recession through 2022
Despite the historic decline in spending, consumers nevertheless supported a higher proportion of jobs during the latest recession than they had from the inception of the data series in through , although the percentage of employment related to consumer spending from to was still within the long-run historic range see figure 3. Between and , consumer-related employment fluctuated between 60 and 62 percent of total employment—at the lower end of the historic range dating to the late s—when the percentage of investment-related employment increased to fuel economic expansion.
But in , the worst year of the recession, PCE-related employment increased to 63 percent of U. In fact, investment-related employment declined to levels previously unobserved in this time series which, as previously noted, dates back to The larger role of consumption during the latest recession and recovery reflects its stability in comparison with other GDP components in the business cycle; the relative stability has been a consistent pattern with all recessions following WWII.
The relative stability also reflects the positive performance of specific sectors for PCE-related employment in the recession, as is discussed in the next section.
Furthermore, the larger percentage of PCE-related employment as a share of all employment underscores the severity of the recession. As seen in figure 3, PCE-related employment as a percentage of all employment tends to increase during economic contractions, when investment-related employment declines more rapidly, and decrease during expansions, when investment-related employment rises more quickly.
Figures 7 and 8 also demonstrate the volatility of each GDP component and the whole economy for output and employment and further reveal the relative stability of PCE. This section analyzes PCE-related employment at the major sector and detailed industry levels, including the most consumer-dependent industries, from through For major sectors, it analyzes overall — employment changes, specific declines in the year when consumer-related employment constituted the majority of job declines , and the recovery.
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For detailed industries, the research focuses on — changes exclusively. The section then concludes with an analysis of long-run sector trends that were affected by the recession. PCE-related employment by major sector. A few sectors were not as affected by the latest recession, and they added PCE-related employment from to Because of the aging of baby boomers and the increased demand for health care, the health care and social assistance industry added nearly 1. With tight economic conditions, enrollment in postsecondary education programs increased—especially community colleges—leading to over , more PCE-related jobs in educational services.
State and local government employment related to consumers grew 2.
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These jobs included mostly transportation and enterprises such as utilities, transit systems including parking and tolls , and gambling. Consumer-related employment also increased, by 7,, in private utilities. The remaining sectors were responsible for nearly 4. Manufacturing jobs related to U. Most of the declines in professional and business service jobs were in the employment services category, primarily an intermediate service that includes employment placement agencies, temporary help services, and professional employer organizations.
PCE-related employment also declined by , for retail trade 4. From to , when the majority of employment declines were consumer-related, five major industry sectors were primarily responsible for the PCE-related job declines: PCE-related manufacturing jobs alone declined by , As for services, wholesale trade was particularly affected, with PCE-related employment decreasing by 8 percent , jobs. In total, more goods-producing jobs tied to consumption were lost than service-providing jobs in This differs from , when more service-providing jobs were lost.
The larger decline in goods-producing jobs in coincided with a larger decline in consumer demand for those industries than the previous year see tables 1 and 4. In six major sectors surpassed levels: Only two of those sectors actually had experienced PCE-related declines between and As for sectors that did not recover, in PCE-related wholesale trade jobs remained , jobs below levels, while PCE-related employment in retail trade had 58, fewer jobs than in Financial activities had , fewer PCE-related jobs, while manufacturing lost more than 1 million such jobs.
In comparison with the recovery from the recession, the severity of the recent recession can be observed at the major sector level. For example, both the professional and business services sector and the leisure and hospitality sector required 1 more year to recover PCE-related employment in the latest recession than in the recession. Furthermore, PCE-related jobs in retail trade had not recovered as of —5 years after the recession began—while they required 4 years to recover from the recession. PCE-related employment by detailed industry: Table 5 shows the detailed industries with the top 10 largest and most rapid consumer-related employment declines from to All of the industries with the largest job declines were services—such as trade, finance, information services, and food services—with the exception of printing and related support activities.
Seven of the industries with the largest PCE-related declines were among the industries that also experienced the largest employment declines in the overall economy, with the exception of private households, telecommunications, and printing and related support activities. Lower consumer spending correlated with the most PCE-related job reductions in the retail trade industry, which declined by , jobs. The 10 industries with the most rapid declines in PCE-related jobs were all manufacturing industries.
Several were involved in the housing and auto markets, such as motor vehicle body and trailer manufacturing — Six of the industries with the most rapid PCE-related job declines were also among the top 10 industries with the most rapid declines in the overall economy.
The remaining four industries with the most rapid job declines for the overall economy were all investment-related in the construction industry. Note that some of the industries that shed jobs most quickly when consumer demand lessened had a low base of consumer-related employment to begin with. Table 5 also shows the detailed industries with the largest and most rapid gains in consumer-related employment during the latest recession.
Industries that gained the most jobs related to consumer spending were typically in the health care or education sectors. Health care and education jobs were also among the fastest growing for both consumer-related employment and total employment. Table 6 ranks the top 20 detailed industries that were most dependent on consumer spending in —meaning industries with the highest ratio of PCE-related jobs to total jobs—and shows how they fared during the recent recession. With the exception of beverage manufacturing, the last in the ranking, all industries most dependent on consumers were service-providing industries.
Just over half of the most consumer-dependent industries gained jobs between and , many because they are in the health care and education fields. Other heavily dependent industries with higher income elasticities of demand, such as recreation and personal services industries, experienced declines associated with lower consumer spending in the recession.
The industry composed of grantmaking, giving services, and social advocacy organizations is also heavily dependent on PCE. Most PCE in this industry comes from the final consumption expenditures of nonprofit institutions serving households. PCE-related employment grew Employment and spending growth in this industry dissipated as the weak recovery of the recession took place through and The recent recession had a notable impact on two long-run trends relating to employment and consumer spending: The percentage of PCE-related jobs in the health care and social assistance industry increased relative to other sectors during the — recession, rising from On the other hand, the percentage of PCE-related jobs in the retail industry hovered around In and , as employment began to recover in other sectors, the percentage of PCE-related jobs in the health care and social assistance sector held steady.
With aging baby boomers, however, upward employment pressure will likely continue for this industry see projections section.
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The recession also had an impact on the decline of PCE-related manufacturing jobs. Consumers—who support over 40 percent of all U. The same pattern exists for all manufacturing jobs in the United States. As seen in table 4, the latest recession intensified the decline of consumer-supported employment in manufacturing industries between and Yet in and , manufacturing jobs tied to consumption and the overall economy did not decline for the first time since Higher domestic demand for the products of U.
With the impact of the Great Recession on consumers and with the aging of the U. Will they continue to support the majority of U. To determine the impact of consumer spending on future economic growth, we take into consideration both the projected output of the U. BLS projects that the — recession and other factors will have an adverse effect on the U.