The jump in unemployment this August was no accident, and no fluke. The Bureau of Labor Statistics found that mass layoff events, where a single employer lays off 50 or more employees, increased 24.7% from July, by far a high for this year. Initial jobless claims also hit a high, giving an indication that the economy is far from recovery:
Employers took 2,690 mass layoff actions in August that resulted in the separation of 259,307 workers, seasonally adjusted, as measured by new filings for unemployment insurance benefits during the month, the U.S. Bureau of Labor Statistics reported today. Each action involved at least 50 persons from a single employer. The number of mass layoff events in August increased by 533 from the prior month, and the number of associated initial claims increased by 52,516. Over the year, the number of mass layoff events increased by 803, and associated initial claims increased by 70,356. Year-to-date mass layoff events (21,184) and initial claims (2,162,202) both recorded program highs through August. In August, 900 mass layoff events were reported in the manufacturing sector, seasonally adjusted, resulting in 93,892 initial claims. Over the month, the number of manufacturing events increased by 279, and associated initial claims increased by 21,626. (See table 1.)
During the 21 months from December 2007 through August 2009, the total number of mass layoff events (seasonally adjusted) was 44,669, and the number of initial claims filed (seasonally adjusted) in those events was 4,556,636. (December 2007 was the start of a recession as designated by the National Bureau of Economic Research.)
The August plunge did not come from any one industry. According to the BLS, seven of the 19 industry categories recorded their highest number of initial job-loss claimants this year. Manufacturing took the biggest hit, accounting for 31% of all mass layoff events.
Until the unemployment numbers hit for August, the Obama administration had insisted that they had turned the corner on job losses. Even afterward, they still claimed to expect that the labor market had stabilized. This shows just the opposite. Larger employers have accelerated layoffs, and that will have secondary impacts on local economies, forcing smaller employers to shed jobs as business declines. Manufacturing losses mean less goods to push through the distribution chain.
It looks like we’re still declining in economic power. The stimulus package has not kept mass layoffs from jumping substantially this summer, and now we will have to see whether that trend continues this month. With initial jobless claims still averaging 563,000 for the past four weeks (new numbers will come out tomorrow), it doesn’t seem to be slowing down.