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Monthly Job Growth Almost Never Exceeds 400K

July 1st, 2010 Michael McDonough

Historically, payroll growth rarely exceeds 400K in any given month, even in the best of times, not good news considering the US has lost 8mn jobs since the start of the recession. Some analysts have discussed a best case scenario where payrolls rise by 1mn a month, bringing us back to the pre-recession peak within eight months, however, in reality this is a near impossibility. Since 1939 there has been only one instance of monthly job growth above the million mark, and as it turns out that stellar number was caused by 700,000 AT&T workers returning from a 22 day strike–meaning far fewer than 1mn jobs were in reality created. In a much more likely scenario where payroll growth averages 200K a month it would take over three years to return to the pre-recession peak; this figure doesn’t even count population growth that has taken place during that period. The attached chart breaks down the frequency of monthly payroll gains and losses from 1939 to now, and certainly doesn’t paint a rosy picture for the labor market.

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