May Jobs Report

Employment in the US hits a new record!  OK, though this is true, the news isn't great (but it's pretty good).  After looking through the report, there was nothing spectacular or gruesome to report.  The number of jobs added (217,000) was solid and was spread among different industries.  The unemployment rate remained at 6.3% while the participation rate remained unchanged at a 35-year low (62.8%), which was disappointing. Rather than get into the details of the monthly changes (April to May), I think it's more interesting to see what has happened from the previous record level of employment (January 2008) to the low in February 2010 to the new record level reached in May 2014.

Here's a table with the winners and losers over the last 6+ years:

	Recession	Recovery	Net Change
Total	-8710	8808	98
Private	-8790	9407	617
Construction	-1968	496	-1472
Manufacturing	-2272	646	-1626
Retail Trade	-1176.1	924.9	-251.2
Profess. & Tech Services	-400.2	892.5	492.3
Management	-46.9	280.4	233.5
Temps	-568.4	884.7	316.3
Education (private)	125.3	288.6	413.9
Health Care	548.3	1015.1	1563.4
Social Assistance	167.7	375.1	542.8
Food/Drinking Places	-367	1326.1	959.1
Fed Govt, not post office	222.3	-85.1	137.2
Post Office	-89.6	-80.3	-169.9
State/Local Education	33.8	-227.8	-194
State/Local Govt (not educ)	-86.4	-205.2	-291.6

You can read it for yourself, but some of the things that stand out to me are:

During the recession (Jan 2008-Feb 2010): the entire net loss of jobs was in the private sector with the federal government (outside the post office) adding more than 200,000 jobs.  The largest job losses took place in manufacturing and construction while health care added more than half a million jobs.

During the recovery (Feb 2010-May 2014): The private sector recovered all the jobs lost and more while the government  incurred the jobs losses.  The biggest winner has been food & drinking places, adding 1.3 million jobs followed by health (+1 million) and retail trade (+925,000).

Net Change (Jan 2008-May 2014): The economy has added nearly 100,000 jobs since the start of 2008 (617,000 in the private sector, loss of half a million government jobs).  The winners were health care (up more than 1.5 million) while food/drinking places added almost 1 million.  though they have recovered somewhat, employment in manufacturing and construction combined has declined by 3.1 million.  Given the weak economy, it's no surprise that social assistance employment has risen by more than 500,000 since the start of the recession.

Given the net employment gains and losses, construction employment has declined from 5.4% of total employment at the start of the recession to 4.3% otday while manufacturing has declined from 9.9% to 8.7%.  Meanwhile, health care has risen from 9.5% to 10.6% while food/drinking places rose from 7% to 7.7%.  Just a few more stats before we finish.  Full-time employment fell from nearly 83% at the start of the recession to 80% in early 2010 before rebounding to 81.3% (so part-time employment rose from 17% to 18.7% over that same period).  The percent of people self-employed declined from 7% to 6.2% with the entire decline taking place during the recovery phase.

What are the key takeaways?  Though overall employment hasn't changed much during the last 76 months, its composition has changed significantly.  The goods sector (manufacturing/construction) has incurred a substantial decline while food/drinking places has experienced a very strong recovery.  Meanwhile, health care continues its long-term growth, though at a slower pace in recent years.

April Jobs Report: Florida and Orlando

The latest report on the state and local economy was released this morning and it continued to indicate that a real recovery is underway.  The headline numbers include a net gain of 34,000 jobs statewide in April (+0.4%) and up nearly 247,000 over the last 12 months (+3.3%) while the unemployment rate fell to 6.2%.  Regular readers of this blog already know what's coming up next - what about the effect of the participation rate?  This is where I'm supposed to say that the participation rate fell and there was no real decline in the unemployment rate.  However ... the participation rate has started to increase recently and is now aapproaching 60.7% (compared to a low of about 60% in late 2013 and 60.4% one year ago.  If the participation rate had remained constant over the last year, the unemployment rate would be even lower.  Of course the recent increase just brings it back to where it was in the second half of 2011.  Prior to the recession (Dec 2007), the participation rate stood at 64.2%.  Given demographics trends, it shouldn't return to that rate.  The recent bounce in the participation rate supports the idea that a significant portion of the decline was cyclical (people not looking for work due to a poor job market; as the job market improves, more people are looking for jobs).

Which industries are leading the rebound?  Food/Accomodation services added thre most jobs in April and have risen 5.6% since April 2013.  Professional/Business services came in second for the month and have increased by 5.1% in the last year, led by employment services, which have risen by 10% and professional/technical services (+4.6%).  Construction continued its recovery, adding nearly 5000 jobs last month and almost 44,000 over thre last year (+12.1%).

Given the strong job growth statewide, which major metropolitan area is posting the strongest gains?  Just under half of the job gains statewide in April were in Metro Orlando, which added 12,000 jobs.  Over the last year, employment in Orlando is up 4.5% (4.9% in the private sector).  Official data for metropolitan areas throughout the US for April won't be released until later this month, but it appears that Orlando may have the fastest rate of job creation of any major metropolitan area in the county.  Which industries have led the surge in employment?  Fortunately, it has been quite diversified including leisure/hospitality (up 14,800 or 6.8%), professional/business services (up 10,300 or 5.9%), retail trade (up 6600 or 5.1%), and construction (up 5200 or 10.5%).  One can question the quality of jobs to some extent, but an increasing proportion of high-paying jobs are being added (particularly in construction and professional/technical services).

What are the key takeaways?  The Florida job market is experiencing significant improvement, with strong employment gains and lower unemployment despite an increase in the number of people seeking work.  Orlando is among the strongest metropolitan areas in the nation in terms of the rate of job creation, with a rising portion of the gains in relatively high-paying industries.

Small Business in the Aftermath of the Great Recession

The most popular post on my blog involves comparisons of economics growth of small business vs. big business.  In Fall 2013, I wrote an article for the Rollins Graduate Business School Alumni Newsletter that examined the issue in more detail ("Small Business in the Aftermath of the Great Recession").  Recently, I made a brief presentation to the Winter Park Chamber of Commerce on the same topic.  What were the key takeaways from the article and presentation?  As one would guess, the rate of new business creation declined significantly during the recession while the rate of business destruction soared.  In recent years, the rate of business destruction has declined to at or below where it was prior to the recession.  Meanwhile, new business creation has improved, but still lags where it was prior to the crisis.

As a result, net business creation is still quite small compared to before 2007 (the most recent figures indicate that net new business creation is about half of what it was in the mid-2000s). According to the Business Employment Dynamics survey, small business (those with fewer than 50 workers) shed 3.6 million jobs during the recession, but recovered 2.2 million through the second quarter of 2013 (latest data available) for a net loss of 1.4 million jobs.  Meanwhile, large businesses (those with more than 500 employees) lost 4.3 million workers during the recession, but added 3.6 million through the second quarter of 2013 for a net loss of 700,000 employees (medium-sized businesses have experienced a net gain of 100,000 workers - loss of 1.6 million followed by a gain of 1.7 million).  Thus, it appears most of the remaining shortfall in employment is due to the underperformance of new and small businesses. Given that there was a financial crisis, access to credit played an important role in the relative weakness of small business.  The following figure illustrates the difference in the net tightening of lending standards for small vs. large business:

Thus, though lending standards began to ease in 2011 for large business, access to credit continued to tighten for small business before stabilizing in 2012 (preliminary evidence indicates that it eased in 2013).  It gets more complex, but it appears that tight credit due to the financial crisis had a larger impact on small business, helping to explain their relatively weak economic performance.  For those interested in more detail, feel free to read the article and.or view the presentation.

The Florida & Orlando Job Market

The latest information about the state and local job market was released this morning, showing rising employment and a declining unemployment rate for both Florida and metro Orlando.  Though I normally comment on the data for the month, since this report wrapped up 2013, I think it's helpful to also reflect on the year.

The unemployment rate in Florida declined from 6.4% to 6.2%.  If you've read this blog before, you know the next question - was it due to employment growth or fewer people participating in the job market?  The participation rate was down fractionally, so this time it reflects an improvement in the labor market.  For metro Orlando, the unemployment rate fell to 5.5% from 5.9%.  Some of this was due to seasonal factors, but it also reflects a stronger job market.

Florida added over 14,000 jobs in December, 13,500 in the private sector led by retail trade, which added 9100 jobs (seasonally adjusted).  Orlando added 6500 jobs in the private sector (6000 overall; not seasonally adjusted), with half of the jobs added in retail trade (2100) and food/accommodation places (1000).  Looking at the monthly figures, it's easy to question the quality of jobs added both statewide (70% in retail) and locally (50% in retail & hotels/restaurants).  However ...

For 2013 as a whole, Florida added nearly 195,000 jobs in the private sector (3.1%).  The largest gains were in construction (+8.4%), retail trade (+5.5%), real estate, rental, & leasing (+4.9%).  Digging a little deeper, leading categories included civil engineering construction (+12.9%), building material and supply stores (+10.3%), architectural, engineering and related services (+9.8%), and specialty trade contractors (+8.7%).  In other words, the housing rebound contributed significantly to a rebound in the Florida job market.

Meanwhile, metro Orlando added 32,500 private sector jobs, a gain of 3.4%.  Leading sectors included ambulatory health care services (+7.1%), arts & recreation (+6.5%), food/drinking places (+5.1%), and real estate, rental & leasing (+4.7%).  Though construction was an outperformer, it didn't play as significant role locally as it did statewide.

What about the unemployment rate?  The Florida unemployment rate declined from 7.9% in December 2012 to 6.2% in December 2013.  However, much of the decline was due to a falling labor force participation rate, which fell from 60.5% to 59.6%.  If the participation rate had remained stable, the current unemployment rate would have been 7.57%.  Nationally, the falling participation rate was responsible for the entire decline in the unemployment rate (i.e., the unemployment rate for the US would have remained at 7.9% if the participation rate had remained constant).

What's the key takeaway from the report?  Though retail was largely responsible for the job gains in Florida in December (remember, the data are seasonally adjusted, so that's not due to Christmas), the Florida job market outperformed that of the nation in 2013, both in terms of job gains and falling unemployment.

Job Market: Florida and Orlando

The latest snapshot of the state and local job market was released this morning, showing unemployment declining to 6.4% in Florida (seasonally adjusted) and 5.8% in Metro Orlando (not seasonally adjusted).  In both cases, the rates were the lowest since 2008.  Does that mean that unemployment is no longer much of an issue in Florida?  While the job market has improved, readers of this blog can probably guess what I'm going to say next.  A major reason for the decline in the Florida unemployment rate over the last year has been the decline in the labor force participation rate, which fell from 60.5% in November 2012 to 59.6% in November 2013 (after already falling quite a bit in prior years).  If the participation rate had remained steady over the last 12 months, the unemployment rate would be about 7.7%, a small decline from last November's 8%.  Though employment growth was modest in November (net increase of 6100 jobs, nearly 60% of which were in retail trade), that's coming off of two strong months of job growth in which the state economy added nearly 69,000 jobs.

Metro Orlando's unemployment rate declined as well, but some of it reflects seasonal issues (the local data released today are not seasonally adjusted) and some of it is likely due to a lower participation rate.  That said, there is real improvement in the local job market, but not as much as implied in the official figures.  Employment growth in both Florida and Orlando exceeded the national average over the last 12 months (2.7% in Orlando, 2.5% in Florida, 1.7% in the US).  Leading growth sectors statewide (since Nov 2012) were retail trade and professional/technical services while food/drinking places and ambulatory health care services were the top gainers for Orlando over the last 12 months (though retail trade was responsible for half of the employment gains in November, primarily due to seasonal issues, i.e., Christmas!).

What are the key takeaways from this morning's report about the state and local job market?  Both continue to improve, but the improvement is somewhat overstated due to fewer people participating in the job market (if you're no longer participating in the job market, you're not counted as unemployed).  A relative strengthening of the Florida and Orlando labor markets is evidenced by employment growth statewide and locally exceeding that of the nation (over the last few months as well as the last year).

The Latest Economic Reports: GDP and Employment

The government released two economic reports last week which, on the surface, indicates that the economy was strengthening in the second half of 2013.  Of course there's more to it than that.  Economic growth for the third quarter was revised up to 3.6% (from an initial report of 2.8%).  Does that mean growth and demand were picking up?  Not quite.  About half of the growth for the quarter was due to an increase in inventories; final sales rose by 1.9% (in line with the previous trend).  In fact, both consumer spending and business investment increased at a slower rate in the third quarter compared to the second quarter.  This was offset somewhat by somewhat faster growth in state/local government spending.  Also, another measure of economic growth, gross domestic income, rose by 1.4% in the third quarter (after growing more quickly than GDP in recent quarters).  What does this mean?  More of the same.  The recent trend in economic growth has been about 2%.

The other major economic news was the November Employment report, which showed an increase of 203,000 jobs with the unemployment rate falling to 7%.  Is this good news?  Yes, but not as good as it appears on the surface.  If you have read this blog before, you probably know what's coming next.  The main reason for the decline in the unemployment rate in recent months (and recent years) is the decline in the participation rate (a smaller portion of the population participating in the job market).  The participation rate fell from 63.2% in September to 63% in November (was 62.8% in October).  If it had remained at 63.2%, the unemployment rate would have been 7.3% in November (a slight increase rather than a decline of 0.2%). The quality of the jobs added appeared to improve somewhat in November compared to previous months, with a higher portion of jobs in relatively high-paying industries such as construction and manufacturing and a smaller share in relatively low-paying industries compared to previous months.

Together, the two reports suggest that the economy continues to grow at a modest pace: an underlying growth rate of 2% with about 200,000 jobs per month.

August Employment Report

The headline numbers from today's report on the job market are that the unemployment rate declined to 7.3% and the economy added 169,000 jobs.  Beneath the surface, the report shows some weakness.  Job growth for June and July were revised down by more than 70,000; employment growth has averaged 148,000 per months over the last 3 months (just under 158,000 in the private sector).  Nearly one-third of net jobs created over the last 3 months have been in retail trade and 2/3 have been in retail trade, food/drinking places, temp jobs, and home health services (relatively low paying jobs).

Why did the unemployment rate decline?  The labor force participation rate fell to 63.2%, the lowest since the summer of 1978.  A major reason for the decline is that, for men over the age of 20, the participation rate declined by 0.3% to 72.3%, the lowest since records started being kept in 1948 (the participation rate didn't change for adult women).  The employment-population ratio declined slightly to 58.6%, which is where it began 2013 (and 2012).  As with the participation rate, the employment-population ratio declined significantly while it rose slightly for adult women.  What about part-time vs. full-time jobs?  There was a shift from part-time to full-time employment last month (modest increase in full-time jobs, noticeable decline in those working part time for economic reasons), but 60% of net jobs created in 2013 are still estimated to be part time.

Add it up and the job market is improving modestly (not as strong as some were thinking).  On a positive note, the ISM service index for August was very strong and auto sales have risen to the highest level since 2007.  On the flip side, it remains to be seen how much a drag the recent spike in interest rates will have on the economy.  So how's the economy doing?  Modest growth in terms of output (GDP) and jobs with some preliminary signs of a possible pickup in the coming months.

March Employment Report

Yes, this blog is still active.  This morning's job report raises quite a few questions about the state of the economy.  First the headlines: the unemployment rate dropped to 7.6%, the lowest since December 2008 (good news?  not so fast).  The economy added 88,000 jobs (95,000 in the private sector); not a good number.  However, there were upward revisions to previous months.  Let's look at some of the details.

The labor force participation rate fell to 63.3%, the lowest since May 1979.  In addition, the employment-population ratio declined to 58.5% (compared to 62.9% before the recession in November 2007, 59.4% at the end of the recession in June 2009, and a post-recession high of 58.7%).  The U6 measure of unemployment declined from 14.3% to 13.8%.  Why did U6 fall by so much?  The number of people working part-time for economic reasons dropped significantly.  Also, there was a larger than normal drop off in the number of people not in the labor force who want a job (that number normally drops for seasonal reasons in March, but the decline was much larger than usual).  If that trend continues, it would suggest that the decline in the participation rate may be more permanent (i.e., people may not re-enter the labor force when conditions improve).

On to employment: after growing by 268,000 in February, nonfarm payrolls added only 88,000 in March.  Which sectors slowed down?  After adding 14,600 jobs in February, retail trade lost 24,100 jobs in March, led by declines in clothing stores (down 15,300) and building material stores (down 10,100).  Which sectors added jobs?  Temp agencies added more than 20,000 workers, food and drinking places added 13,000 (both low-paying sectors).  The brightest spot was specialty trade contractors (part of construction), which added over 23,000 jobs.  Was the slowdown a direct result of sequestration?  Though the federal government shed 14,000 jobs, most of that was due to the trimming of postal workers (down 11,700).  Though sequestration is likely to have an impact down the road, it's effects were minimal in March.

What's the initial takeaway?  Given the strong February report, one should not read too much in the March report, but it does raise concerns.  However, this was not a good report.  Both the establishment and household surveys were weak.  There's evidence that more people are "permanently" leaving the labor force.  Also, though construction is growing, other parts of the economy are sluggish.  Sequestration played little, if any, role, but the increase in the payroll tax probably had a more significant impact.  I hope to post more thoughts later today after digging into the report a little more.

Afternoon Update:  Though seasonal adjustments seemed to have distorted the employment data in recent years, that does not appear to be an issue in this case.  For example, using the average seasonal adjustments from before the recession would have resulted in an even a smaller increase in employment in March.  Also, several people have noted the Spring slowdowns in the last two years.  In 2011, the slowdown began in May (a gain of 115,000 compared to 304,000 in April) with a brief rebound in June before a summer slump.  In 2012, the slowdown began in April and lasted through the summer.  So this slowdown is earlier than in recent years.  Of course, one must be cautious in reading too much in one month's report.

February Employment Report

The headlines from the February Employment Report contained some better than expected news about the job market: the unemployment rate fell to 7.7% (from 7.9%) and the economy added 236,000 jobs (246,000 in the private sector.  Let's look at some of the details.  The February numbers look quite good, but should be interpreted along with somewhat weaker numbers for January to assess the trend.  For example, though the private sector added 246,000 jobs in February, it added 140,000 in January, which averages 193,000 per month so far in 2013.  Looking at particular sectors, construction has added 140,000 jobs over the past year, a majority of those in the last 2 months (+73,000 in 2013).  To empahsize the significance of the pickup in construction, it added about 8,000 jobs per month, on average, in 2012, but is averaging more than 36,000 per month so far in 2013.  Other sectors and industries showing significant gains include retail trade, food accomodations, and health care.  One industry that you may not have expected to make a significant contribution, motion picture and sound recording industries, added nearly 21,000 jobs in February.

Why  did the unemployment rate fall?  A combination of more people employed and fewer people in the labor force.  The participation rate declined back to a 30-year low of 63.5% (the last time it was lower was in 1979).  Meanwhile, the employment-population ratio remained at 58.6%, unchanged so far in 2013 as well as from February 2012, but up from the post-recession low of 58.2% in November 2010 and still considerably below it's pre-recession high of 62.9% in November 2007.

What are the key takeaways from the report?  The job market has gotten off to a pretty good start in 2013, led by the rebound in construction.  That said, the employment gains in February were across the board, not concentrated in one sector.  Given the weakness in January, the job market is not signaling a robust economy, but an economy that continues to move forward.  In the coming months, there will be a battle between the rebounding housing market as seen in rising employment in construction and the fiscal drag due to the increase in the payroll tax and sequestration.

October Job Report

The October job report presented some good news mixed with some not so good news.  At first glance, I thought the report was quite positive, better than the report for September.  But didn't the unemployment rate rise in October (now at 7.9%) while it declined in September (from 8.1 to 7.8%)?    As discussed in last month's post concerning the job market, last month's decline wasn't supported by the other data within the report or elsewhere.  This month's report had several positive points.  The private sector added 184,000 jobs in October after adding an upwardly revised 128,000 in September.  Job creation was spread across many sectors, which is a good sign.  Of course calling job gains of 184,000 good shows how low expectations have been set.  More good news can be seen in the household survey which reported an increase in the labor force participation rate as well as more job creation.  The employment-population ratio rose to 58.8%, the highest since August 2009, still down from over 63% prior to the recession.  So the headlines from both surveys used to estimate the state of the job market were positive.

What's the not so good news?  The index of aggregate hours worked (see table B9 - production and nonsupervisory workers) declined slightly (another measure of aggregate hours worked increased slightly).  Looking at more details by industry (table B2), it looks like there were small declines in weekly hours worked for various industries.  Though the establishment survey (used to estimated nonfarm payrolls and hours worked) doesn't distinguish between part-time and full-time employment, the increase in employment accompanied by a small decrease in average weekly hours suggests many of the new hires are part-time workers.  The household survey does distinguish between part-time and full-time employment and indicates that about one-third of the jobs created based on its survey were part time (table A9).  In addition, average hourly earnings declined slightly and is now up 1.6% over the last 12 months, which means real hourly earnings (i.e., after adjusting for inflation) are flat (since consumer inflation is running at about 1.7% (according to the PCE index).

What's the takeaway?  It was a pretty good report overall, showing more job growth spread across many industries and more people returning to the job market.  However, the weakness in hours worked and hourly earnings are reasons for caution.  In addition, emloyment gains seem to be outpacing other indicators of the economy including GDP (which rose by 1.3% and 2% in the last 2 quarters, respectively) and business investment (which is been sluggish of late).

June Employment Report

The June employment report provides another set of data confirming that the economy is growing at a sluggish pace.  The US economy added 80,000 jobs in June and the unemployment rate remained at 8.2%.  The broad measure of unemployment (U6) rose slightly to 14.9%, above the recent low of 14.5% in March-April 2012. Depending on your perspective, you can view this as significantly below its high of 17.2% in October 2009 but above the low of 7.9% prior to the recession.
About half of the jobs created were in 2 industries: temp agencies added 25,000 jobs while food services and drinking added 15,000.  Local government added 4,000 jobs, but that masks some interesting dynamics.  Local education shed 14,000 jobs (seasonally adjusted) while local government added 18,000 jobs in other areas.  That builds on the trend from May during which local government eliminated 10,000 education jobs but added 5000 outside of education.

Though there are some problems with seasonal adjustments previously noted, employment growth declined significantly in the second quarter.  The chart below shows the growth in jobs by sector in the first and second quarters of 2012, along with the change in the growth (numbers are in thousands):

Industry	2012Q1	2012Q2	Change
Total	+677	+225	-452
Private	+678	+274	-404
Leisure/Hospitality	+127	+2	-125
Education	+63	-56	-119
Private Education	+40	-5	-45
State & Local Education	+23	-51	-74
Manufacturing	+124	+30	-94
Professional/Business Services	+186	+106	-80
Construction	+3	-40	-43
Health Care	+104	+65	-39
Wholesale/Retail Trade	+21	+54	+33
Local Govt (non-education)	-3	+29	+32

Most of the decline in employment growth took place in the private sector (decline of 404,000 compared to 48,000 in government).  Leading the slowdown were declines in job creation in leisure & hospitality and education (including both private & public education), each accounting for about 30% of the decline in employment growth.  While employment in leisure & hospitality went from robust to flat, education went from adding 63,000 jobs to losing 56,000.  Other sectors including manufacturing, professional/business services, and health care continued to add jobs, but at much slower rates while construction went from little growth to shedding jobs.  Two sectors that experienced more rapid job creation were wholesale/retail trade and, to the surprise of many, local government (aside from local education).  What does this imply?  The slowdown in job creation was broad based, reflecting a slowdown in the overall economy.

State of the Economy: Economic Growth vs. Job Market

Depending on where you look, the economy is either continuing to grow at a modest pace or beginning to accelerate.  Economic growth was about 1.6% over the last 12 months, which is likely to rise to about 2% when first quarter GDP is released next month.  Meanwhile, employment growth has increased recently, rising just over 1.5% for the last year, but at an annualized rate of 2.3% so far in 2012.  So GDP is plodding along while the job market appears to be strengthening.  I decided to take a deeper look into this to see how it compares to past economic recoveries.  Let's take a look at a couple of charts to examine this relationship.  The first chart simply presents economic growth and employment growth over the previous 12 months (blue line is economic growth, red line is employment):


As you can see, the blue line is normally above the red line (economic growth typically exceeds employment growth).  With few exceptions, employment growth only exceeds economic growth near the beginning of recessions.  Let's look at it from another perspective.  Another measure of the job market is the aggregate hours worked.  Many economists see this as a more precise gauge of the job market since it not only accounts for the number of jobs, but also how many hours people are working on the job.  By taking the ratio of GDP to hours worked, one gets an estimate of productivity (output per hour).  The following chart shows the behavior of GDP per hour over time.



From this chart, it is evident that the current recovery is similar to but also different from past recoveries.  When the economy comes out of a recession, GDP per hour typically grows quickly as evidenced by the recoveries of 1970, 1975, 1983, and the current recovery.  As the expansion takes hold, the surge typically subsides.  The average difference betweem economic growth and employment growth over the period was 1.5% (so when economic growth is 2.5%, employment growth tends to be about 1%).  What's different this time is that it didn't just moderate as in the past, but is actually shrinking by 1%, which is lower than virtually any other period since data for hours worked became available (only comparable decline was during the severe recession of 1974, when it also declined by 1%).  The only other time in which it shrank without leading to or being in a recession was in 1994.

I'm not predicting a recession, but pointing out that it would be unprecedented for the job market to continue to improve unless economic growth strengthened significantly.  Given consensus forecasts of modest economic growth (about 2.5% for 2012), the recent strengthening of the labor market is unlikely to be sustained (current pace would result in about 3 million jobs this year).  If employment grew by about 1.5% in 2012, that would still mean a gain of about 2 million jobs.  Of course many factors will determine the outcome including the European recession, the slowdown in China, rising gas prices, etc.  The key point is that the performance of the job market must eventually reflect what's happening to economic growth.