US Loses 600k Jobs In January, 1.7 Million Over Past Three Months

The latest jobs report was abysmal showing a loss of 600k jobs last month, 1.7 jobs lost over the past three months and 3.7 million losses since December of 2007. Since the subject will undoubtedly be covered to death in the coming days I figured I’d focus on point you towards some resources/data points on the subject, in addition to adding some perspective around the numbers.

Let’s start off with links to coverage on the topic from The WSJ, The NY Times and The Financial Times.

Second here is a graphic from the NY Times depicting job losses since 2007:

Graphic courtesy of The NY Times

Another graphic showing where this month’s numbers rank from an all time perspective:

Graphic courtesy of The Financial Times

As you can see last month’s job losses rank 3rd all time (and with revisions could easily be #1 or #2), and three of the five worse months for job losses have occurred over the past three months.

Here is a link to an interactive graphic from the NY Times that provides various data points related the current situation around jobs.

Now for some perspective:

Chicago is the nation’s 3rd largest city and has a total population that is roughly 1.1 million less than the number of people who lost their jobs over the past 13 months. Another way to look at it is that the total workforce of the state of PA is about 6.2 million; i.e. imagine if 1/2 of PA’s currently employed workforce was suddenly unemployed.

The 1.7 million jobs lost in the last three months represents 46% of the jobs lost since December ‘07.

Based on a per capita income of $26,178, a loss of 598,000 represents a loss of $15.7 billion from the economy over the space of a month, and the loss of 3.7 billion represents a loss of $97 billion.

Granted a lot of these people are receiving unemployment benefits and/or severance and $97 billion is only 0.7% of GDP, however the impact of losing $97 billion is greater than the numbers suggest. Let’s not forget that dollars often change hands multiple times so the loss of a single dollar impacts multiple people, and the loss of a job within a family, community, etc, often causes other people to tighten their belts as well.

Another way to look at it is that $97 billion is nearly 1/4 of Wal-Mart’s (WMT) annual revenue and nearly 50% more than Target’s (TGT), and the impact of losing that $97 billion is magnified due to the number of hands those dollars touch, the deeper discounts the stores (and others in retail sector) would use to attract customers, etc. Now add in decreased access to credit and employed consumers tightening their belts as a hedge against the economy/job loss, and the situation the retail sector is in comes into better focus.

The most worrisome aspect of the current employment situation is the fact that if we maintain the numbers from the past three months, we’ll be on pace to lose 5.1 million more jobs over the next nine months.

Sources:

The NY Times: “Economy Shed 598,000 Jobs in January” — Edmund L. Andrews, February 6, 2009.

The Financial Times : “US economy sheds 598,00 Jobs” — Alan Rappeport, February 6, 2009.

All Population & Income data courtesy of the US Census Bureau , and represents current figures as if July 1, 2008.

Revenue data courtesy of Yahoo Finance

Disclosure: at the time of publishing the author didn’t own a position in any of the companies mentioned in this article; the ideas expressed are solely the opinions of the author and shouldn’t be viewed as financial or investment advice

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