First-time claims for unemployment insurance benefits headed higher last week"”not a good sign for the strength of the economic recovery. Or should I say "recovery"? The Department of Labor numbers, out this morning, mark the fourth increase in the past five weeks and the highest rate of claims in nine months.
Another set of government data which came out yesterday sheds some interesting light on where those losses may be coming from. In a phrase: small businesses.
That's not typically what you'd expect in a recovery. Small businesses are often given the credit for getting people back to work the fastest. But according to the Bureau of Labor Statistics's Business Employment Dynamics report for the fourth quarter of 2009, 61.8% of all net job losses came from firms with one to 49 employees. Considering that those firms only employ 29% of workers, that's pretty remarkable. A headline in today's WSJ reads "Small Firms Lagging, With Bulk of Job Losses."
Although it is important to keep in mind that such a conclusion depends on how you define "small." In this paper, BLS economist Jessica Helfand looks at firms with 1 to 99 employees during the height of the recession and finds a less pronounced effect. She also compares the most recent recession to the past two, and comes to an interesting conclusion. While the 1990-91 recession was characterized by more pain at small firms, and large firms bore the brunt in the 2001 downturn, our most recent episode has ridden roughshod over firms of all sizes.
Which is kind of what it feels like here on the ground.
At what point can we safly say the recession is over, and the depression's begun?
Thanks, Barbara. Maybe businesses of all sizes that choose to hoard cash (instead of employees, but I digress) should remember: no jobs, no recovery, QED. I presume the top managers are slashing their own salaries to keep employees around, yes? No? . "¦btw, Barbara, thanks for last 2 housing posts + interview. I left praise / thoughts at last post but was during the graveyard shift. After noticing what Kate Pickert and swampland teammates suffer to the point of tears from other readers go thru with reader replies, I want to make sure reporters both here and at swampland notice rare compliments instead of the usual complaining we're known for. Keep up the good work.
Barbara, for your next post or dead-tree piece on large biz / hiring / NOT, this is a good link to ponder (although loyal readers here and at swampland noticed similar stuff long ago, but this blog gets more page hits than our whiny comments). Hope it helps out "“ http://stanleybing.blogs.fortune.cnn.com/2010/08/19/how-wall-street-is-screwing-up-the-recovery/
Get e-mail updates from TIME's The Curious Capitalist in your inbox and never miss a day.
The Curious Capitalist Favorite Links Barry Ritholtz Brad DeLong Calculated Risk Econbrowser Econlog Ezra Klein Felix Salmon Floyd Norris Greg Mankiw Growthology James Pethokoukis John Gapper Justin Fox Marginal Revolution Mark Thoma Megan McArdle Nicholas Carr Paul Kedrosky Paul Krugman Philip Coggan Planet Money Roger Parloff Ryan Avent Swampland The Stash adFactory.getCmAd(300, 250, "global", "tout").write(); adFactory.getCmAd(300, 100, "article", "tout").write(); ArchiveAugust 2010SMTWTFS1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 More News from Our Partners CNN Facebook Places raises more privacy concerns Facebook Places: Here's how it works Sensors monitor U.S. oil pipelines for spills Huffington Post Fred Whelan and Gladys Stone: They Took My Ideas and Gave Somebody Else the Job Norb Vonnegut: The Giving Pledge: What Do We Want From the Wealthy? 7 Reasons Why You SHOULDN'T Buy a Home: James Altucher DailyFinance.com IPO Filing Offers Peek Under the Hood of New GM Facebook Now Keeps Tabs on Your Whereabouts Why Does the Mint Keep Making Dollar Coins? Rotten Tomato Comic-Con Ketchup: Guillermo Del Toro to helm Haunted Mansion flick RT on DVD & Blu-Ray: Clash of the Titans and Repo Men Dude! It's the 15 Manliest Movies Ever! Life When a Bull Goes Wild Skulls Everywhere Royals Watching Other People Dance More on TIME.com » The Anti-Depressant Secrets of Ketamine Out of Israel, an Embarrassing Facebook Post Fallout from Russia's Fires: The Ashes of Chernobyl? Quotes of the Day » "It was like, 'Here's a manual, go fly the space shuttle.' " STEVE WLODEK, a juror from the trial of former Illinois governor Rod Blagojevich, on the overwhelming instructions given to the jurors by the judge More Quotes » var ad = adFactory.getAd(88, 31); ad.setPosition(13) ad.write(); Today in Pictures » Hang Time Stay Connected with TIME.com Learn More » Subscribe to RSS Feeds Sign Up for Newsletters Add TIME Widgets Read TIME Mobile on Your Phone Become a Fan of TIME Get TIME Twitter Updates adFactory.getCmAd(115, 42, "homepage", "tout").write(); © 2010 Time Inc. All rights reserved | Privacy Policy | RSS | Newsletter | TIME For Kids | LIFE.com Subscribe | Contact Us | Terms of Use | Media Kit | Reprints & Permissions | Opinion Leaders Panel | Help | Site Map TiiAdTrackRevSci(); function tiQuantcast() { } _qoptions={ qacct:"p-5dyPa639IrgIw", labels:tiQuantcast() } var _sf_async_config={uid:3088,domain:"time.com",pingServer:"ptimeinc.chartbeat.net"}; (function(){ function loadChartbeat() { window._sf_endpt=(new Date()).getTime(); var e = document.createElement('script'); e.setAttribute('language', 'javascript'); e.setAttribute('type', 'text/javascript'); e.setAttribute('src', (("https:" == document.location.protocol) ? "https://s3.amazonaws.com/" : "http://") + "static.chartbeat.com/js/chartbeat.js"); document.body.appendChild(e); } var oldonload = window.onload; window.onload = (typeof window.onload != 'function') ? loadChartbeat : function() { oldonload(); loadChartbeat(); }; })(); Powered by WordPress.com VIP var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E")); try { var pageTracker = _gat._getTracker("UA-10268691-1"); pageTracker._trackPageview(); } catch(err) {} var _sf_async_config={uid:3088,domain:"curiouscapitalist.blogs.time.com",pingServer:"ptimeinc.chartbeat.net"}; (function(){ function loadChartbeat() { window._sf_endpt=(new Date()).getTime(); var e = document.createElement('script'); e.setAttribute('language', 'javascript'); e.setAttribute('type', 'text/javascript'); e.setAttribute('src', (("https:" == document.location.protocol) ? "https://s3.amazonaws.com/" : "http://") + "static.chartbeat.com/js/chartbeat.js"); document.body.appendChild(e); } var oldonload = window.onload; window.onload = (typeof window.onload != 'function') ? loadChartbeat : function() { oldonload(); loadChartbeat(); }; })(); _qoptions={qacct:'p-18-mFEk4J448M',labels:'language.en,posttag.job-creation,posttag.hiring,vip.timecuriouscapitalist'}; try{COMSCORE.beacon({c1:2,c2:7518284});}catch(e){} st_go({'blog':'5320466','v':'wpcom','user_id':'0','post':'11475','subd':'timecuriouscapitalist'}); ex_go({'crypt':'RDZ8LFkxbXF2TVluJVFmT0xoZkVaUCVrM3R3cCU2Wi10dTZtNy10XTZYNmhTfmltUFt4QkVba04taWo3UFpjZTA9S1ZaNT9XZ0VnUHZtZyZ6Tm0vZWRsbW93cmtTdyVhMkwrclNyeVY0NSwzbHU0Tk0wV1lhTWM9ZWZIeFZqLVZzPzFhdFBFUl8vdlpCWWloVCxQMl1bTlVKeTJVNCtFTiwsWXN6TWtRXURnUzBDaXRqMUh0YjIxMSxqRHxIL2Y1ZFd4d2wmMjYyd0pKX3FLZEJ+aS9HWlhOfD81XWY='}); addLoadEvent(function(){linktracker_init('5320466',11475);}); Read Full Article »