Understanding the Labor Market in a Deflationary Economic Context Paul E. Harrington Center for Labor Market Studies Northeastern University Boston, Massachusetts January 2009

A Thumbnail Sketch of the Economic Crisis An Economy out of Balance Total GDP 2000 to 2007 $92.5 Trillion Total Purchases of G&S$97.0 Trillion Difference-$4.5 Trillion

How did we purchase more than we produced? Purchased Goods from Overseas U.S. Balance of Trade Deficit increased by about $4.5 Trillion

How did we pay for excess consumption? Household debt doubled by $6.8 trillion Between 2000 and 2005 average home price doubled Almost half of this debt secured by mortgages Savings rate fell to zero

A Housing Bubble “Market Values Fluctuate: Debt is Forever” Unlike equity bubbles housing bubbles quickly convert to spending Banks “make your home work for you” Out of $6.8 Trillion increase in debt, $4.2 Trillion NOT spent on housing Consumer electronics/autos/trucks

Who lent us the money? China, oil producers including Russia and Saudi Arabia These nations purchased U.S. Treasuries-safe and secure Held assets in U.S. banks—swelling domestic banking reserves

How did this fuel borrowing and spending? Large reserves fueled rapid growth in money supply Fractional reserve lending system meant that growth in reserves resulted in large growth in money supply via the money multiplier –result was low interest rates

Federal Reserve Response Fed did nothing Greenspan: World has entered into a “new economic paradigm (rejection of liquidity preference theory and acceptance of the efficient market theory) Prices set in asset and housing markets are ‘correct’

Fed continued Absence of inflation over 2000 to 2005 led to fed to inaction Fed supported rising asset prices Permitted rapid expansion in money supply and declining real interest rates Fueled further increases in housing and stock markets (asset inflation)

How did housing bubble burst? Mortgage loans made to people with no hope of making payments 1. Sub-prime 2. Home equity loans based on assumption of perpetually rising housing prices 3. Teaser rates 4. Home values collapse -down 25 Percent since mid 2006

What’s different about this downturn? Rise in asset values are based on financiers making increasingly risky loans Banks developed new ways of sell off these risky loans into world markets CDOs Credit Default Swaps Estimated $30 Trillion losses in wealth across the world

Problem is now well beyond mortgage backed securities and housing market Commercial lending Credit card lending Auto lending All suffering rising default problems So banking system sharply reduces lending— money multiplier collapses—liquidity trap

Financial meltdown has led to deflation Deflation is a downward pressure on prices that sharply reduces the level of output, employment and income Deflation is a self-reinforcing downward spiral based on future expectations about prices that reflect overall economic conditions

What is the Current Economic Situation? Global Demand for Goods and Services Falling Sharply 4 th qtr GDP in Industrialized Nations fell 6 to 7 Percent annual average pace. 1 st qtr 2009 GDP is expected to fall at same pace.

Asset Values Continue to Decline Sharp decline in housing values—25 percent decline in mean price level Additional 20 percent decline expected this year Equity assets declined by 50 percent since peak Estimated that about 1/3 rd of value of world wealth wiped out last year U.S. wealth value fell by about $11 trillion in 2008

Deflationary Cycle Decline in value of assets leads to Increased desire and intensity of savings—depress demand growth Increased savings rate (now over 5%) Decreased consumption (retail sales contracted by 28 % apr in 4 th qtr 2008) Corporate profits fall sharply—huge banking sector losses-rise of zombie banks Continuing reductions in consumption make expanding profits next to impossible

…GDP Falls Declines in C+I results in GDP declines Profit declines result in cut-backs in production Lay-offs rise sharply, job vacancies fall sharplhours Accelerating rate of job losses Rising unemployment Sharp reductions in hours of work per week, increase in part-time work for economic reasons

…Decline Accelerates Employment losses lead to real income declines Households make effort to raise savings rate Expectations of future prices of asset values fall— decrease purchases of assets-further reduces their price Values of housing declines Value of equities declines These paper declines feed back into a new round of cutbacks in the real economy- an adverse feedback loop or deflationary spiral

Phases of Downturn August March 2008:market cap of banks insurance companies begins to erode Monthly losses in value average $150 billion (Bear Stearns 3/2008) March to Sept 2008: Losses mounted to $260 billion per month (Lehman bankruptcy 9/2008) September 2008 to January 2009: Losses in value of banks and insurance companies explodes– average decline of $ 660 billion permonth Asset write downs in global finance about $5 trillion

Job Market Developments Recession begins in December 2007 Payroll employment declines average 137,000 per month over the period August to November job losses accelerate to 436,000 per month December to February job losses in U.S, average 662,000 Expectations of this months reports suggest similarly large

CES Total Nonfarm Employment by Region, Trough to Peak (Q to Q4 2007), Seasonally Adjusted, in thousands RegionQ2 2003Q Absolute Change Relative Change Kansas1,311.31, % Michigan4,415.94, % Ohio5,399.55, % Illinois5,810.15, % Indiana2,889.32, % Wisconsin2,775.62, % Minnesota2,660.92, % Iowa1,436.01, % Nebraska % Missouri2,678.62, % Heartland30, , % US129, ,000.38, %

CES Total Nonfarm Employment by Region, Peak to Present (Q to Q4 2008), Seasonally Adjusted, in thousands RegionQ4 2007Q Absolute Change Relative Change Kansas1,388.21, % Michigan4,247.64, % Ohio5,424.15, % Illinois5,990.65, % Indiana2,988.72, % Wisconsin2,889.02, % Minnesota2,774.22, % Iowa1,525.51, % Nebraska % Missouri2,799.82, % Heartland30, , % US138, , , %

CES Total Nonfarm Employment by Region, Q to Q4 2008, Seasonally Adjusted, in thousands RegionQ1 2001Q Absolute Change Relative Change Kansas1,352.41, % Michigan4,610.64, % Ohio5,599.65, % Illinois6,047.75, % Indiana2,960.42, % Wisconsin2,836.42, % Minnesota2,708.32, % Iowa1,475.01, % Nebraska % Missouri2,744.12, % Heartland31, , % US132, ,727.03, %

CES Heartland Region Supersector Employment Peak to Trough (Q to Q2 2003), Seasonally Adjusted, in thousands SupersectorQ1 2001Q Absolute Change Relative Change Total Nonfarm31, , % Mining and Logging % Construction1,427.21, % Manufacturing5,214.74, % Trade, Transportation, and Utilities6,283.25, % Information % Financial Activities1,758.81, % Professional and Business Services3,567.53, % Education and Health Services3,687.83, % Leisure and Hospitality2,665.42, % Other Services1,268.91, % Government4,616.44, %

CES Heartland Region Supersector Employment Trough to Peak (Q to Q4 2007), Seasonally Adjusted, in thousands SupersectorQ2 2003Q Absolute Change Relative Change Total Nonfarm30, , % Mining and Logging % Construction1,393.91, % Manufacturing4,522.34, % Trade, Transportation, and Utilities5,969.06, % Information % Financial Activities1,796.61, % Professional and Business Services3,380.53, % Education and Health Services3,891.34, % Leisure and Hospitality2,697.52, % Other Services1,273.21, % Government4,689.14, %

CES Heartland Region Supersector Employment Peak to Present (Q to Q4 2008), Seasonally Adjusted, in thousands SupersectorQ4 2007Q Absolute Change Relative Change Total Nonfarm30, , % Mining and Logging % Construction1,385.41, % Manufacturing4,243.84, % Trade, Transportation, and Utilities6,037.55, % Information % Financial Activities1,797.91, % Professional and Business Services3,745.33, % Education and Health Services4,324.34, % Leisure and Hospitality2,850.62, % Other Services1,292.71, % Government4,677.74, %

CES Heartland Region Supersector Employment Q to Q4 2008, Seasonally Adjusted, in thousands SupersectorQ1 2001Q Absolute Change Relative Change Total Nonfarm31, , % Mining and Logging % Construction1,427.21, % Manufacturing5,214.74, , % Trade, Transportation, and Utilities6,283.25, % Information % Financial Activities1,758.81, % Professional and Business Services3,567.53, % Education and Health Services3,687.84, % Leisure and Hospitality2,665.42, % Other Services1,268.91, % Government4,616.44, %

Changes in Nonfarm Industry Employment in the Heartland Region, Civilian Workers Age 16+, Dec Jan 2007 Avg to Dec 2007-Jan 2008 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec07-Jan08 Avg Absolute Change Relative Change Agriculture, forestry, fishing, and hunting523,727515,495-8, % Mining68,86342,615-26, % Construction2,088,2311,977, , % Manufacturing5,175,2505,035, , % Wholesale and retail trade4,812,7994,715,462-97, % Transportation and utilities1,614,0621,777,272163, % Information817,900685, , % Financial activities2,289,5452,166, , % Professional and business services2,882,7653,061,203178,4386.2% Educational and health services6,965,4747,195,204229,7303.3% Leisure and hospitality2,463,9182,491,20127,2831.1% Other services1,351,8071,381,60329,7962.2% Public administration1,105,7871,120,72714,9401.4% Total32,160,12832,165,7595,6310.0%

LAUS Changes in Employment Dec 2007 to Jan 2009, Seasonally Adjusted RegionDec-07Jan-09Absolute ChangeRelative Change Kansas1,427,6871,420,834-6, % Michigan4,624,9464,299, , % Ohio5,627,2765,434, , % Illinois6,356,2766,082, , % Indiana3,071,0422,950, , % Wisconsin2,947,8772,884,132-63, % Minnesota2,772,6722,719,124-53, % Iowa1,607,5831,592,056-15, % Nebraska960,377947,882-12, % Missouri2,856,8582,767,195-89, % Heartland32,252,59431,098,036-1,154, % US146,294,000142,099,000-4,195, %

LAUS Changes in Unemployment Dec 2007 to Jan 2009, Seasonally Adjusted RegionDec-07Jan-09Absolute ChangeRelative Change Kansas61,69487,35825, % Michigan363,738564,982201, % Ohio344,969524,049179, % Illinois374,597518,636144, % Indiana145,878300,692154, % Wisconsin137,541215,40377, % Minnesota139,035222,18983, % Iowa64,36180,60916, % Nebraska26,33842,78316, % Missouri160,466241,31480, % Heartland1,818,6172,798,015979, % US7,541,00011,616,0004,075, %

LAUS Changes in the Unemployment Rate Dec 2007 to Jan 2009, Seasonally Adjusted RegionDec-07Jan-09Absolute ChangeRelative Change Kansas % Michigan % Ohio % Illinois % Indiana % Wisconsin % Minnesota % Iowa % Nebraska % Missouri % Heartland % US %

Changes in Nonfarm Industry Employment in the Heartland Region, Civilian Workers Age 16+, Dec Jan 2008 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec07- Jan08 Avg Dec08- Jan09 Avg Absolute Change Relative Change Agriculture, forestry, fishing, and hunting515,495524,7579,2621.8% Mining42,61560,19517, % Construction1,977,1851,886,577-90, % Manufacturing5,035,2644,353, , % Wholesale and retail trade4,715,4624,473, , % Transportation and utilities1,777,2721,650, , % Information685,728622,220-63, % Financial activities2,166,8002,091,225-75, % Professional and business services3,061,2032,933, , % Educational and health services7,195,2047,479,935284,7314.0% Leisure and hospitality2,491,2012,499,3648,1630.3% Other services1,381,6031,474,68293,0796.7% Public administration1,120,7271,205,77185,0447.6% Total32,165,75931,255, , %

Changes in Occupation Employment in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2007-Jan 2008 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec07-Jan08 Avg Absolute Change Relative Change Management, business, and financial occupations4,738,8374,660,839-77, % Professional and related occupations6,368,2516,589,191220,9403.5% Service occupations5,102,2985,063,490-38, % Sales and related occupations3,757,9763,516, , % Office and administrative support occupations4,401,3314,433,16031,8290.7% Farming, fishing, and forestry occupations150,514148,646-1, % Construction and extraction occupations1,629,7571,573,414-56, % Installation, maintenance, and repair occupations1,189,4641,155,079-34, % Production occupations2,707,4352,844,334136,8995.1% Transportation and material moving occupations2,114,2642,180,74766,4833.1% Total32,160,12732,165,7585,6310.0%

Changes in Nonfarm Industry Employment in the Heartland Region, Civilian Workers Age 16+, Dec Jan 2007 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec08-Jan09 Avg Absolute Change Relative Change Agriculture, forestry, fishing, and hunting523,727524,7571,0300.2% Mining68,86360,195-8, % Construction2,088,2311,886, , % Manufacturing5,175,2504,353, , % Wholesale and retail trade4,812,7994,473, , % Transportation and utilities1,614,0621,650,02035,9582.2% Information817,900622, , % Financial activities2,289,5452,091, , % Professional and business services2,882,7652,933,44350,6781.8% Educational and health services6,965,4747,479,935514,4617.4% Leisure and hospitality2,463,9182,499,36435,4461.4% Other services1,351,8071,474,682122,8759.1% Public administration1,105,7871,205,77199,9849.0% Total32,160,12831,255, , %

Changes in Occupation Employment in the Heartland Region, Civilian Workers Age 16+, Dec 2007-Jan 2008 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec07- Jan08 Avg Dec08- Jan09 Avg Absolute Change Relative Change Management, business, and financial occupations4,660,8394,588,399-72, % Professional and related occupations6,589,1916,717,764128,5732.0% Service occupations5,063,4905,255,124191,6343.8% Sales and related occupations3,516,8583,305, , % Office and administrative support occupations4,433,1604,153, , % Farming, fishing, and forestry occupations148,646172,80024, % Construction and extraction occupations1,573,4141,402, , % Installation, maintenance, and repair occupations1,155,0791,122,210-32, % Production occupations2,844,3342,405, , % Transportation and material moving occupations2,180,7472,131,860-48, % Total32,165,75831,255, , %

Changes in Occupation Employment in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec06- Jan07 Avg Dec08- Jan09 Avg Absolute Change Relative Change Management, business, and financial occupations4,738,8374,588, , % Professional and related occupations6,368,2516,717,764349,5135.5% Service occupations5,102,2985,255,124152,8263.0% Sales and related occupations3,757,9763,305, , % Office and administrative support occupations4,401,3314,153, , % Farming, fishing, and forestry occupations150,514172,80022, % Construction and extraction occupations1,629,7571,402, , % Installation, maintenance, and repair occupations1,189,4641,122,210-67, % Production occupations2,707,4352,405, , % Transportation and material moving occupations2,114,2642,131,86017,5960.8% Total32,160,12731,255, , %

Changes in Employment by Gender in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2007-Jan 2008 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec07-Jan08 Avg Absolute Change Relative Change Male17,002,98316,829, , % Female15,157,14615,335,771178,6251.2% Total32,160,12932,165,7585,6290.0%

Changes in Employment by Gender in the Heartland Region, Civilian Workers Age 16+, Dec 2007-Jan 2008 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec07-Jan08 Avg Dec08-Jan09 Avg Absolute Change Relative Change Male16,829,98716,067, , % Female15,335,77115,187, , % Total32,165,75831,255, , %

Changes in Employment by Gender in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec08-Jan09 Avg Absolute Change Relative Change Male17,002,98316,067, , % Female15,157,14615,187,56330,4170.2% Total32,160,12931,255, , %

Changes in Unemployment by Gender in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2007-Jan 2008 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec07-Jan08 Avg Absolute Change Relative Change Male1,103,6451,123,24719,6021.8% Female716,779761,70744,9286.3% Total1,820,4241,884,95464,5303.5%

Changes in Unemployment by Gender in the Heartland Region, Civilian Workers Age 16+, Dec 2007-Jan 2008 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec07-Jan08 Avg Dec08-Jan09 Avg Absolute Change Relative Change Male1,123,2471,723,496600, % Female761,7071,016,645254, % Total1,884,9542,740,141855, %

Changes in Unemployment by Gender in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec08-Jan09 Avg Absolute Change Relative Change Male1,103,6451,723,496619, % Female716,7791,016,645299, % Total1,820,4242,740,141919, %

Changes in Labor Force by Gender in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2007-Jan 2008 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec07-Jan08 Avg Absolute Change Relative Change Male18,106,62817,953, , % Female15,873,92516,097,478223,5531.4% Total33,980,55334,050,71270,1590.2%

Changes in Labor Force by Gender in the Heartland Region, Civilian Workers Age 16+, Dec 2007-Jan 2008 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec07-Jan08 Avg Dec08-Jan09 Avg Absolute Change Relative Change Male17,953,23417,790, , % Female16,097,47816,204,208106,7300.7% Total34,050,71233,995,168-55, %

Changes in Labor Force by Gender in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec08-Jan09 Avg Absolute Change Relative Change Male18,106,62817,790, , % Female15,873,92516,204,208330,2832.1% Total33,980,55333,995,16814,6150.0%

Changes in Employment by Age in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2007-Jan 2008 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec07-Jan08 Avg Absolute Change Relative Change Years1,466,4031,370,765-95, % Years3,120,7682,947, , % Years6,878,3916,641, , % Years15,176,84615,456,453279,6071.8% 55+ Years5,517,7205,748,731231,0114.2% Total32,160,12832,165,7585,6300.0%

Changes in Employment by Age in the Heartland Region, Civilian Workers Age 16+, Dec 2007-Jan 2008 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec07-Jan08 Avg Dec08-Jan09 Avg Absolute Change Relative Change Years1,370,7651,304,350-66, % Years2,947,9782,894,654-53, % Years6,641,8316,318, , % Years15,456,45314,677, , % 55+ Years5,748,7316,059,656310,9255.4% Total32,165,75831,255, , %

Changes in Employment by Age in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec08-Jan09 Avg Absolute Change Relative Change Years1,466,4031,304, , % Years3,120,7682,894, , % Years6,878,3916,318, , % Years15,176,84614,677, , % 55+ Years5,517,7206,059,656541,9369.8% Total32,160,12831,255, , %

Changes in Unemployment by Age in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2007-Jan 2008 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec07-Jan08 Avg Absolute Change Relative Change Years245,360311,74966, % Years268,105283,01414,9095.6% Years453,233407,524-45, % Years631,474683,84752,3738.3% 55+ Years222,251198,819-23, % Total1,820,4231,884,95364,5303.5%

Changes in Unemployment by Age in the Heartland Region, Civilian Workers Age 16+, Dec 2007-Jan 2008 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec07-Jan08 Avg Dec08-Jan09 Avg Absolute Change Relative Change Years311,749291,134-20, % Years283,014444,342161, % Years407,524552,396144, % Years683,8471,127,795443, % 55+ Years198,819324,474125, % Total1,884,9532,740,141855, %

Changes in Unemployment by Age in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec08-Jan09 Avg Absolute Change Relative Change Years245,360291,13445, % Years268,105444,342176, % Years453,233552,39699, % Years631,4741,127,795496, % 55+ Years222,251324,474102, % Total1,820,4232,740,141919, %

Changes in Labor Force by Age in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2007-Jan 2008 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec07-Jan08 Avg Absolute Change Relative Change Years1,711,7631,682,514-29, % Years3,388,8733,230, , % Years7,331,6247,049, , % Years15,808,32016,140,300331,9802.1% 55+ Years5,739,9715,947,550207,5793.6% Total33,980,55134,050,71170,1600.2%

Changes in Labor Force by Age in the Heartland Region, Civilian Workers Age 16+, Dec 2007-Jan 2008 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec07-Jan08 Avg Dec08-Jan09 Avg Absolute Change Relative Change Years1,682,5141,595,484-87, % Years3,230,9923,338,996108,0043.3% Years7,049,3556,871, , % Years16,140,30015,805, , % 55+ Years5,947,5506,384,130436,5807.3% Total34,050,71133,995,169-55, %

Changes in Labor Force by Age in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec08-Jan09 Avg Absolute Change Relative Change Years1,711,7631,595, , % Years3,388,8733,338,996-49, % Years7,331,6246,871, , % Years15,808,32015,805,400-2,9200.0% 55+ Years5,739,9716,384,130644, % Total33,980,55133,995,16914,6180.0%

Changes in Male Employment by Age in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2007-Jan 2008 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec07-Jan08 Avg Absolute Change Relative Change Years701,528645,059-56, % Years1,579,0681,517,035-62, % Years3,722,2533,512, , % Years8,067,9018,140,33672,4350.9% 55+ Years2,932,2323,014,85182,6192.8% Total17,002,98216,829, , %

Changes in Male Employment by Age in the Heartland Region, Civilian Workers Age 16+, Dec 2007-Jan 2008 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec07-Jan08 Avg Dec08-Jan09 Avg Absolute Change Relative Change Years645,059594,262-50, % Years1,517,0351,488,944-28, % Years3,512,7053,276, , % Years8,140,3367,604, , % 55+ Years3,014,8513,102,66487,8132.9% Total16,829,98616,067, , %

Changes in Male Employment by Age in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec08-Jan09 Avg Absolute Change Relative Change Years701,528594, , % Years1,579,0681,488,944-90, % Years3,722,2533,276, , % Years8,067,9017,604, , % 55+ Years2,932,2323,102,664170,4325.8% Total17,002,98216,067, , %

Changes in Male Unemployment by Age in the Heartland Region, Civilian Workers Age 16+, Dec Jan 2007 Avg to Dec 2007-Jan 2008 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec07-Jan08 Avg Absolute Change Relative Change Years129,556179,32349, % Years174,109162,335-11, % Years278,823260,854-17, % Years392,226406,20213,9763.6% 55+ Years128,930114,534-14, % Total1,103,6441,123,24819,6041.8%

Changes in Male Unemployment by Age in the Heartland Region, Civilian Workers Age 16+, Dec Jan 2008 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec07-Jan08 Avg Dec08-Jan09 Avg Absolute Change Relative Change Years179,323177,273-2, % Years162,335292,689130, % Years260,854346,81985, % Years406,202718,358312, % 55+ Years114,534188,35773, % Total1,123,2481,723,496600, %

Changes in Male Unemployment by Age in the Heartland Region, Civilian Workers Age 16+, Dec Jan 2007 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec08-Jan09 Avg Absolute Change Relative Change Years129,556177,27347, % Years174,109292,689118, % Years278,823346,81967, % Years392,226718,358326, % 55+ Years128,930188,35759, % Total1,103,6441,723,496619, %

Changes in Male Labor Force by Age in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2007-Jan 2008 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec07-Jan08 Avg Absolute Change Relative Change Years831,084824,382-6, % Years1,753,1771,679,370-73, % Years4,001,0763,773, , % Years8,460,1278,546,53886,4111.0% 55+ Years3,061,1623,129,38568,2232.2% Total18,106,62617,953, , %

Changes in Male Labor Force by Age in the Heartland Region, Civilian Workers Age 16+, Dec 2007-Jan 2008 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec07-Jan08 Avg Dec08-Jan09 Avg Absolute Change Relative Change Years824,382771,535-52, % Years1,679,3701,781,633102,2636.1% Years3,773,5593,623, , % Years8,546,5388,323, , % 55+ Years3,129,3853,291,021161,6365.2% Total17,953,23417,790, , %

Changes in Male Labor Force by Age in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec08-Jan09 Avg Absolute Change Relative Change Years831,084771,535-59, % Years1,753,1771,781,63328,4561.6% Years4,001,0763,623, , % Years8,460,1278,323, , % 55+ Years3,061,1623,291,021229,8597.5% Total18,106,62617,790, , %

Changes in Female Employment by Age in the Heartland Region, Civilian Workers Age 16+, Dec Jan 2007 Avg to Dec 2007-Jan 2008 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec07-Jan08 Avg Absolute Change Relative Change Years764,875725,706-39, % Years1,541,7001,430, , % Years3,156,1383,129,125-27, % Years7,108,9457,316,117207,1722.9% 55+ Years2,585,4882,733,879148,3915.7% Total15,157,14615,335,770178,6241.2%

Changes in Female Employment by Age in the Heartland Region, Civilian Workers Age 16+, Dec Jan 2008 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec07-Jan08 Avg Dec08-Jan09 Avg Absolute Change Relative Change Years725,706710,088-15, % Years1,430,9431,405,710-25, % Years3,129,1253,042,043-87, % Years7,316,1177,072, , % 55+ Years2,733,8792,956,992223,1138.2% Total15,335,77015,187, , %

Changes in Female Employment by Age in the Heartland Region, Civilian Workers Age 16+, Dec Jan 2007 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec08-Jan09 Avg Absolute Change Relative Change Years764,875710,088-54, % Years1,541,7001,405, , % Years3,156,1383,042, , % Years7,108,9457,072,730-36, % 55+ Years2,585,4882,956,992371, % Total15,157,14615,187,56330,4170.2%

Changes in Female Unemployment by Age in the Heartland Region, Civilian Workers Age 16+, Dec Jan 2007 Avg to Dec 2007-Jan 2008 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec07-Jan08 Avg Absolute Change Relative Change Years115,804132,42616, % Years93,996120,68026, % Years174,410146,671-27, % Years239,248277,64538, % 55+ Years93,32184,285-9, % Total716,779761,70744,9286.3%

Changes in Female Unemployment by Age in the Heartland Region, Civilian Workers Age 16+, Dec Jan 2008 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec07-Jan08 Avg Dec08-Jan09 Avg Absolute Change Relative Change Years132,426113,861-18, % Years120,680151,65330, % Years146,671205,57658, % Years277,645409,437131, % 55+ Years84,285136,11751, % Total761,7071,016,644254, %

Changes in Female Unemployment by Age in the Heartland Region, Civilian Workers Age 16+, Dec Jan 2007 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec08-Jan09 Avg Absolute Change Relative Change Years115,804113,861-1, % Years93,996151,65357, % Years174,410205,57631, % Years239,248409,437170, % 55+ Years93,321136,11742, % Total716,7791,016,644299, %

Changes in Female Labor Force by Age in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2007-Jan 2008 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec07-Jan08 Avg Absolute Change Relative Change Years880,679858,132-22, % Years1,635,6961,551,623-84, % Years3,330,5483,275,796-54, % Years7,348,1937,593,762245,5693.3% 55+ Years2,678,8092,818,164139,3555.2% Total15,873,92516,097,477223,5521.4%

Changes in Female Labor Force by Age in the Heartland Region, Civilian Workers Age 16+, Dec 2007-Jan 2008 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec07-Jan08 Avg Dec08-Jan09 Avg Absolute Change Relative Change Years858,132823,949-34, % Years1,551,6231,557,3635,7400.4% Years3,275,7963,247,619-28, % Years7,593,7627,482, , % 55+ Years2,818,1643,093,109274,9459.8% Total16,097,47716,204,207106,7300.7%

Changes in Female Labor Force by Age in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec08-Jan09 Avg Absolute Change Relative Change Years880,679823,949-56, % Years1,635,6961,557,363-78, % Years3,330,5483,247,619-82, % Years7,348,1937,482,167133,9741.8% 55+ Years2,678,8093,093,109414, % Total15,873,92516,204,207330,2822.1%

Changes in Employment by Race in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2007-Jan 2008 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec07-Jan08 Avg Absolute Change Relative Change White26,587,16426,682,95495,7900.4% Black2,667,4872,585,120-82, % Asian or Pacific Islander844,172773,347-70, % Hispanic1,730,4621,753,86923,4071.4% Other330,845370,46839, % Total32,160,13032,165,7585,6280.0%

Changes in Employment by Race in the Heartland Region, Civilian Workers Age 16+, Dec 2007-Jan 2008 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec07-Jan08 Avg Dec08-Jan09 Avg Absolute Change Relative Change White26,682,95425,836, , % Black2,585,1202,520,703-64, % Asian or Pacific Islander773,347814,24140,8945.3% Hispanic1,753,8691,704,819-49, % Other370,468378,7158,2472.2% Total32,165,75831,255, , %

Changes in Employment by Race in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec08-Jan09 Avg Absolute Change Relative Change White26,587,16425,836, , % Black2,667,4872,520, , % Asian or Pacific Islander844,172814,241-29, % Hispanic1,730,4621,704,819-25, % Other330,845378,71547, % Total32,160,13031,255, , %

Changes in Unemployment by Race in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2007-Jan 2008 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec07-Jan08 Avg Absolute Change Relative Change White1,291,7481,344,10252,3544.1% Black337,174354,52217,3485.1% Asian or Pacific Islander36,61425,669-10, % Hispanic113,285130,73417, % Other41,60329,926-11, % Total1,820,4241,884,95364,5293.5%

Changes in Unemployment by Race in the Heartland Region, Civilian Workers Age 16+, Dec 2007-Jan 2008 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec07-Jan08 Avg Dec08-Jan09 Avg Absolute Change Relative Change White1,344,1022,040,760696, % Black354,522401,34946, % Asian or Pacific Islander25,66948,68023, % Hispanic130,734202,86872, % Other29,92646,48316, % Total1,884,9532,740,140855, %

Changes in Unemployment by Race in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec08-Jan09 Avg Absolute Change Relative Change White1,291,7482,040,760749, % Black337,174401,34964, % Asian or Pacific Islander36,61448,68012, % Hispanic113,285202,86889, % Other41,60346,4834, % Total1,820,4242,740,140919, %

Changes in Labor Force by Race in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2007-Jan 2008 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec07-Jan08 Avg Absolute Change Relative Change White27,878,91228,027,056148,1440.5% Black3,004,6612,939,642-65, % Asian or Pacific Islander880,786799,016-81, % Hispanic1,843,7471,884,60340,8562.2% Other372,448400,39427,9467.5% Total33,980,55434,050,71170,1570.2%

Changes in Labor Force by Race in the Heartland Region, Civilian Workers Age 16+, Dec 2007-Jan 2008 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec07-Jan08 Avg Dec08-Jan09 Avg Absolute Change Relative Change White28,027,05627,877, , % Black2,939,6422,922,052-17, % Asian or Pacific Islander799,016862,92163,9058.0% Hispanic1,884,6031,907,68723,0841.2% Other400,394425,19824,8046.2% Total34,050,71133,995,167-55, %

Changes in Labor Force by Race in the Heartland Region, Civilian Workers Age 16+, Dec 2006-Jan 2007 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec08-Jan09 Avg Absolute Change Relative Change White27,878,91227,877,309-1,6030.0% Black3,004,6612,922,052-82, % Asian or Pacific Islander880,786862,921-17, % Hispanic1,843,7471,907,68763,9403.5% Other372,448425,19852, % Total33,980,55433,995,16714,6130.0%

Changes in Employment by Education in the Heartland Region, Civilian Workers Age 25+, Dec 2006-Jan 2007 Avg to Dec 2007-Jan 2008 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec07-Jan08 Avg Absolute Change Relative Change High School Dropout1,751,3201,730,318-21, % High School Graduate8,740,2388,658,072-82, % Some College8,055,6728,280,369224,6972.8% Bachelor's or Higher9,025,7269,178,257152,5311.7% Total27,572,95627,847,016274,0601.0%

Changes in Employment by Education in the Heartland Region, Civilian Workers Age 25+, Dec 2007-Jan 2008 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec07-Jan08 Avg Dec08-Jan09 Avg Absolute Change Relative Change High School Dropout1,730,3181,594, , % High School Graduate8,658,0728,424, , % Some College8,280,3698,027, , % Bachelor's or Higher9,178,2579,009, , % Total27,847,01627,056, , %

Changes in Employment by Education in the Heartland Region, Civilian Workers Age 25+, Dec 2006-Jan 2007 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec08-Jan09 Avg Absolute Change Relative Change High School Dropout1,751,3201,594, , % High School Graduate8,740,2388,424, , % Some College8,055,6728,027,337-28, % Bachelor's or Higher9,025,7269,009,531-16, % Total27,572,95627,056, , %

Changes in Unemployment by Education in the Heartland Region, Civilian Workers Age 25+, Dec Jan 2007 Avg to Dec 2007-Jan 2008 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec07-Jan08 Avg Absolute Change Relative Change High School Dropout175,670222,63046, % High School Graduate559,235521,973-37, % Some College370,904370, % Bachelor's or Higher201,150174,827-26, % Total1,306,9591,290,189-16, %

Changes in Unemployment by Education in the Heartland Region, Civilian Workers Age 25+, Dec Jan 2008 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec07-Jan08 Avg Dec08-Jan09 Avg Absolute Change Relative Change High School Dropout222,630260,02437, % High School Graduate521,973848,395326, % Some College370,759549,081178, % Bachelor's or Higher174,827347,165172, % Total1,290,1892,004,665714, %

Changes in Unemployment by Education in the Heartland Region, Civilian Workers Age 25+, Dec Jan 2007 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec08-Jan09 Avg Absolute Change Relative Change High School Dropout175,670260,02484, % High School Graduate559,235848,395289, % Some College370,904549,081178, % Bachelor's or Higher201,150347,165146, % Total1,306,9592,004,665697, %

Changes in Labor Force by Education in the Heartland Region, Civilian Workers Age 25+, Dec 2006-Jan 2007 Avg to Dec 2007-Jan 2008 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec07-Jan08 Avg Absolute Change Relative Change High School Dropout1,926,9901,952,94825,9581.3% High School Graduate9,299,4739,180, , % Some College8,426,5768,651,128224,5522.7% Bachelor's or Higher9,226,8769,353,084126,2081.4% Total28,879,91529,137,205257,2900.9%

Changes in Labor Force by Education in the Heartland Region, Civilian Workers Age 25+, Dec 2007-Jan 2008 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec07-Jan08 Avg Dec08-Jan09 Avg Absolute Change Relative Change High School Dropout1,952,9481,854,476-98, % High School Graduate9,180,0459,273,09893,0531.0% Some College8,651,1288,576,418-74, % Bachelor's or Higher9,353,0849,356,6963,6120.0% Total29,137,20529,060,688-76, %

Changes in Labor Force by Education in the Heartland Region, Civilian Workers Age 25+, Dec 2006-Jan 2007 Avg to Dec 2008-Jan 2009 Avg (Not Seasonally Adjusted) Dec06-Jan07 Avg Dec08-Jan09 Avg Absolute Change Relative Change High School Dropout1,926,9901,854,476-72, % High School Graduate9,299,4739,273,098-26, % Some College8,426,5768,576,418149,8421.8% Bachelor's or Higher9,226,8769,356,696129,8201.4% Total28,879,91529,060,688180,7730.6%

U.S. Payroll Employment, Seasonally Adjusted, in Thousands Sector December 2007 December 2008 Absolute Change Relative Change Total Nonfarm 138, , , % Total Private 115,745112,975-2, % Goods-Producing 21,97620,616-1, % Service-Providing 116,102114,873-1, % Private Service-Providing 93,76992,359-1, % Federal Govt. 2,7352, % State Govt. 5,1535, % State Govt. Education Services 2,3332, % Local Govt. 14,44514, % Local Govt. Education Services 8,0178, %

U.S. Payroll Employment, Seasonally Adjusted, in Thousands Sector December 2007 August 2008 Absolute Change Relative Change Total Nonfarm 138, , % Total Private 115,745114, % Goods-Producing 21,97621, % Service-Providing 116,102116, % Private Service-Providing , % Federal Govt. 2,7352, % State Govt. 5,1535, % State Govt. Education Services 2,3332, % Local Govt. 14,44514, % Local Govt. Education Services 8,0178, %

Changes in U.S. Payroll Employment, Seasonally Adjusted, in Thousands Dec 2007Aug 2008 Absolute Change Relative Change Total Nonfarm 138, , % Natural Resources and Mining % Construction 7,465.07, % Manufacturing 137,72.013, % Trade, Transport, Utilities 26, , % Wholesale Trade 6,072.96, % Retail Trade 15, , % Information 3,018.02, % Financial Activities 8,252.08, % Professional and Business Services 18, , % Professional and Technical Services 7,820.57, % Management of Companies and Enterprises 1,847.81, % Administrative and Waste Service 8,462.88, % Education and Health Services 18, , % Leisure and Hospitality 13, , % Other Services 5,507.05, % Government 22, , %

U.S. Payroll Employment, Seasonally Adjusted, in Thousands Sector August 2008 December 2008 Absolute Change Relative Change Total Nonfarm 137,423135,489-1, % Total Private 114,909112,975-1, % Goods-Producing 21,36720, % Service-Providing ,873-1, % Private Service-Providing 93,54292,359-1, % Federal Govt. 2,7482, % State Govt. 5,2105, % State Govt. Education Services 2,3792, % Local Govt. 14,55614, % Local Govt. Education Services 8,0598, %

Changes in U.S. Payroll Employment, Seasonally Adjusted, in Thousands Aug 2008Dec 2008 Absolute Change Relative Change Total Nonfarm 137, , , % Natural Resources and Mining % Construction 7,153.06, % Manufacturing 13, , % Trade, Transport, Utilities 26, , % Wholesale Trade 6,007.15, % Retail Trade 15, , % Information 2,984.02, % Financial Activities 8,196.08, % Professional and Business Services 17, , % Professional and Technical Services 7,859.57, % Management of Companies and Enterprises 1,832.11, % Administrative and Waste Service 8,162.77, % Education and Health Services 18, , % Leisure and Hospitality 13, , % Other Services 5,526.05, % Government 22, %

Who Lost Jobs? Age, Gender, Race, Educational and Occupational Characteristics of 2008 Employment Losses in the Nation

Trends in the Number of Employed Persons

Trends in the Number of Employed Persons Aged 16+ in the U.S. by Gender Gender December 2007 December 2008 Absolute Change Relative Change Total, ,294143,338-2, % Men78,31575,881-2, % Women67,97567, %

Trends in the Number of Employed Persons Aged 16+ in the U.S. by Age Age December 2007 December 2008 Absolute Change Relative Change ,8225, % ,73113, % ,65230, % ,86766,788-2, % 55+26,21827, %

Trends in the Number of Employed Persons (16 and Older) By Age, December 2007 to December 2008

Trends in the Number of Employed Males Aged 16+ in the U.S. by Age Age (Males) December 2007 December 2008 Absolute Change Relative Change ,7792, % ,2796, % ,44216, % ,91335,339-1, % 55+13,90214, %

Trends in the Number of Employed Females Aged 16+ in the U.S. by Age Age (Females) December 2007 December 2008 Absolute Change Relative Change ,0432, % ,4526, % ,21014, % ,95431, % 55+12,31612, %

Trends in the Number of Employed Persons Aged 16+ in the U.S. by Race-Ethnicity Race-Ethnicity December 2007 December 2008 Absolute Change Relative Change White119,947117,357-2, % Black16,01315, % Asian*6,9586, % Hispanic**21,86122, %

Trends in the Number of Employed Males 20+ in the U.S. by Race-Ethnicity Race-Ethnicity (Males, 20+) December 2007 December 2008 Absolute Change Relative Change White62,69261,101-1, % Black % Asian*NA Hispanic**11,92111, %

Trends in the Number of Employed Persons Aged 25+ in the U.S. by Educational Attainment Educational Attainment December 2007 December 2008 Absolute Change Relative Change Total, ,961124,962-1, % Dropout11,35610, % High School Graduate36,92835,683-1, % Some College35,07134, % Bachelor's or higher43,60643, %

Distribution of Employment Losses Among Persons Aged 25+, by Educational Attainment, December 2007 to December 2008

Trends in the Number of Employed Persons Aged 16+ in the U.S. (Not Seasonally Adjusted) Occupation December 2007 December, 2008 Abs. Change Relative Change Management and Finance21,69921, % Professional/Related30,62530, % Service Occupations23,55124, % Sales16,65416, % Office and Admin. Support19,81218,633-1, % Construction Occs.9,3028,025-1, % Installation/Repair5,2265, % Production9,4688,421-1, % Trans./Material Moving9,0758, %

Trends in the Number of Unemployed Persons

Trends in the Number of Unemployed Persons Aged 16+ in the U.S. by Gender Gender December 2007 December 2008 Absolute Change Relative Change Total, 16+7,54111,1083, % Men4,1156,4602, % Women3,4294,6281, %

Unemployment Relative Change

Unemployment 5 Best & Worst States

October & November 2008 Unemployment by State

Trends in the Size of the Labor Force Aged 16+ in the U.S. by Gender Gender December 2007 December 2008 Absolute Change Relative Change Total, ,835154, % Men82,43082, % Women71,40472, %

Trends in the Number of Unemployed Persons Aged 16+ in the U.S. by Age Age December 2007 December 2008 Absolute Change Relative Change ,1831, % ,3911, % ,6012, % ,5594,0361, % , %

Trends in the Size of the Labor Force Aged 16+ in the U.S. by Age Age December 2007 December 2008 Absolute Change Relative Change ,0056, % ,12215, % ,25333, % ,42670, % 55+27,06128,5051,4445.3%

Trends in the Number of Unemployed Males Aged 16+ in the U.S. by Age Age (Males) December 2007 December 2008 Absolute Change Relative Change % , % , % ,3092, % %

Trends in the Size of the Labor Force Males Aged 16+ in the U.S. by Age Age (Males) December 2007 December 2008 Absolute Change Relative Change ,4563, % ,0598, % ,34418, % ,22237, % 55+14,34915, %

Trends in the Number of Unemployed Females Aged 16+ in the U.S. by Age Age (Females) December 2007 December 2008 Absolute Change Relative Change % % % ,2481, % %

Trends in the Size of the Labor Force Females Aged 16+ in the U.S. by Age Age (Females) December 2007 December 2008 Absolute Change Relative Change ,5493, % ,0637, % ,90815, % ,20233, % 55+12,68213, %

Trends in the Number of Unemployed Persons Aged 16+ in the U.S. by Race-Ethnicity Race-Ethnicity December 2007 December 2008 Absolute Change Relative Change White5,4568,2772, % Black1,5612, % Asian* % Hispanic**1,3572, %

Trends in the Size of the Labor Force Aged 16+ in the U.S. by Race-Ethnicity Race-Ethnicity December 2007 December 2008 Absolute Change Relative Change White125,403125, % Black17,57417, % Asian*7,2257, % Hispanic**23,21824, %

Trends in the Number of Unemployed Males Aged 20+ in the U.S. by Race-Ethnicity Race-Ethnicity (Males, 20+) December 2007 December 2008 Absolute Change Relative Change White2,5424,2301, % Black6441, % Asian*NA Hispanic**7331, %

Trends in the Size of the Male Labor Force Aged 20+ in the U.S. by Race-Ethnicity Race-Ethnicity (Males, 20+) December 2007 December 2008 Absolute Change Relative Change White65,23465, % Black7,2446, % Asian*NA Hispanic**12,65412, %

Trends in the Number of Unemployed Persons Aged 25+ in the U.S. by Educational Attainment Educational Attainment December 2007 December 2008 Absolute Change Relative Change Total, 25+5,0158,0323, % Dropout9271, % High School Graduate1,7862,9721, % Some College1,3562, % Bachelor's or higher9461, %

Trends in the Size of the Labor Force Aged 25+ in the U.S. by Educational Attainment Educational Attainment December 2007 December 2008 Absolute Change Relative Change Total, ,976132,994-1, % Dropout12,28312, % High School Graduate38,71438, % Some College36,42737, % Bachelor's or higher44,55245, %

Trends in the Number of Unemployed Persons (Experienced Labor Force) Aged 16+ in the U.S. (Not Seasonally Adjusted) OccupationDec. 2007Dec Absolute Change Relative Change Management and Finance % Professional/Related % Service Occupations1,5712, % Sales9031, % Office and Admin. Support8141, % Construction Occupations9901, % Installation/Repair % Production % Trans./Material Moving %

Trends in the Size of the Experienced Labor Force Aged 16+ in the U.S. (Not Seasonally Adjusted) Occupation Dec Dec Absolute Change Relative Change Management and Finance22,16022, % Professional/Related31,20531, % Service Occupations25,12226,4281,3065.2% Sales17,55717, % Office and Admin/Support20,62619, % Construction Occupations10,2929, % Installation/Repair5,4215, % Production10,0689, % Trans/Material Moving9,6509, %

Unemployment & Labor Underutilization

Trends in Unemployment Rates, Aged 16+ in the U.S. by Race-Ethnicity Race-Ethnicity December 2007 December 2008 Absolute Change Relative Change White4.4%6.6%2.2%51.4% Black8.9%11.9%3.0%34.2% Asian*3.7%5.1%1.4%36.8% Hispanic**5.8%8.4%2.6%44.3%

Trends in Unemployment Rates of Males Aged 20+ in the U.S. by Race-Ethnicity Race-Ethnicity December 2007 December 2008 Absolute Change Relative Change White3.9%6.5%2.6%66.2% Black8.9%15.4%6.5%73.5% Asian*NA Hispanic**5.8%9.4%3.6%61.6%

Trends in Full-time and Part-Time Employment December 2007 December 2008 Absolute Change Relative Change Full-time121,501116,865-4, % Part-time24,70126,2501,5496.3% Voluntary Part-time19,53618, % Involuntary Part-Time4,6388,0383, % Slack Work3,1015,3042, %

Trends in Unemployment By Reasons Reasons for Unemployment December 2007 December 2008 Absolute Change Relative Change Job Losers3,7856,4712, % Job Leavers7871, % Reentrants2,3022, % New Entrants %

Trends in the Distribution of the Unemployed by Reasons Reasons for Unemployment December 2007December 2008 Job Losers50.0%58.4% Job Leavers10.4%9.1% Reentrants30.4%25.1% New Entrants9.2%7.5%

Trends in the Duration of Unemployment Duration of Unemployment December 2007 December 2008 Absolute Change Relative Change Less Than 5 Weeks2,7183, % 5 to 14 Weeks2,3143,3981, % 15+ Weeks2,2844,5172, % 27+ Weeks1,3152,5911, %

Trends in the Distribution of the Unemployed by Duration Duration of Unemployment December 2007 December 2008 Less Than 5 Weeks36.2%29.2% 5 to 14 Weeks30.8%30.4% 15+ Weeks33.1%40.4% 27+ Weeks17.5%23.2%

Trends in the Mean and Median Weeks of Unemployment in the U.S.

Trends in the 16+ Population Outside of the Labor Force, by Job Desire Job Desire Among OLF December 2007 December 2008 Absolute Change Relative Change No Job Desire79,45180,6861,2351.6% With a Job Desire4,3985, % Marginally Attached1,3441, %

Trends in the Labor Underutilization Rate and its Components December 2007 December 2008 Absolute Change Relative Change Total Unemployed7,54111,1083, % Involuntarily Part-time4,6388,0383, % Marginally Attached1,3441, % Labor Underutilization13,52321,0547, % Adjusted Labor Force155,179156,3541,1750.8% Underutilization Rate8.7%13.5%4.8%54.5%

Trends in the Unemployment and Underutilization Rates of the 16+ Population

Trends in the Estimates of Demand Deficiency in the Labor Market Time Period Number of Unemp. Persons Number of Job Openings Ratio of Unemp. to Job Openings Demand Deficient Structural/ Frictional December January 20077,0294, %60.8% December January 20087,5553, %52.6% August-September, 20089,5923, %35.2% November-December ,1082, %25.1%

Re-Employment and Job Vacancy

Changes in the Level and Rate of Job Openings in the U.S., Q to Oct-Nov Average 2008, Seasonally Adjusted (Levels in Thousands) Sector Q Oct-Nov Average 2008 Absolute Change Relative Change Total Nonfarm Level3,996.72, , % Rate Construction Level % Rate Manufacturing Level % Rate Trade, Transportation, and Utilities Level % Rate Retail Trade Level % Rate Professional and Business Services Level % Rate Education and Health Services Level % Rate Leisure and Hospitality Level % Rate Government Level % Rate

Changes in the Level of Job Openings in the U.S. by Region, Q to Oct-Nov Average 2008, Seasonally Adjusted (Levels in Thousands) Region Q Oct-Nov Average 2008 Absolute Change Relative Change Northeast Level % Rate South Level1,607.71, % Rate Midwest Level % Rate West Level % Rate

Trend in the Level of Total Nonfarm Job Openings in the U.S

Changes in the Level and Rate of Hires in the U.S., Q to Oct-Nov Average 2008, Seasonally Adjusted (Levels in Thousands) Sector Q Oct-Nov Average 2008 Absolute Change Relative Change Total Nonfarm Level 4,767.73, % Rate Construction Level % Rate Manufacturing Level % Rate Trade, Transportation, and Utilities Level % Rate Retail Trade Level % Rate Professional and Business Services Level % Rate Education and Health Services Level % Rate Leisure and Hospitality Level % Rate Government Level % Rate

Changes in the Level of Hires in the U.S. by Region, Q to Oct-Nov Average 2008, Seasonally Adjusted (Levels in Thousands) Region Q Oct-Nov Average 2008 Absolute Change Relative Change Northeast Level % Rate South Level , % Rate Midwest Level1, % Rate West Level1, % Rate

Trend in the Level of Total Nonfarm Hires in the U.S

Changes in the Level and Rate of Separations in the U.S., Q to Oct-Nov Average 2008, Seasonally Adjusted (Levels in Thousands) Sector Q Oct-Nov Average 2008 Absolute Change Relative Change Total Nonfarm Level 4,547.34, % Rate Construction Level % Rate Manufacturing Level % Rate Trade, Transportation, and Utilities Level 1, % Rate Retail Trade Level % Rate Professional and Business Services Level % Rate Education and Health Services Level % Rate Leisure and Hospitality Level % Rate Government Level % Rate

Changes in the Level of Separations in the U.S. by Region, Q to Oct-Nov Average 2008, Seasonally Adjusted (Levels in Thousands) Region Q Oct-Nov Average 2008 Absolute Change Relative Change Northeast Level % Rate South Level1,728.31, % Rate Midwest Level % Rate West Level1,140.01, % Rate

Trend in the Level of Total Nonfarm Separations in the U.S

Changes in the Level and Rate of Quits in the U.S., Q to Oct-Nov Average 2008, Seasonally Adjusted (Levels in Thousands ) Sector Q Oct-Nov Average 2008 Absolute Change Relative Change Total Nonfarm Level % Rate Construction Level % Rate Manufacturing Level % Rate Trade, Transportation, and Utilities Level % Rate Retail Trade Level % Rate Professional and Business Services Level % Rate Education and Health Services Level % Rate Leisure and Hospitality Level % Rate Government Level % Rate

Changes in the Level of Quits in the U.S. by Region, Q to Oct-Nov Average 2008, Seasonally Adjusted (Levels in Thousands ) Region Q Oct-Nov Average 2008 Absolute Change Relative Change Northeast Level % Rate South Level % Rate Midwest Level % Rate West Level % Rate

Trend in the Level of Total Nonfarm Quits in the U.S

Changes in the Level of Net Hires and Separations in the U.S., Q to Oct-Nov Average 2008, Seasonally Adjusted (Levels in Thousands ) Sector Q Oct-Nov Average 2008 Total Nonfarm Construction Manufacturing Trade, Transportation, and Utilities Retail Trade Professional and Business Services Education and Health Services Leisure and Hospitality Government

Changes in the Level of Net Hires and Separations in the U.S. by Region, Q to Oct-Nov Average 2008, Seasonally Adjusted (Levels in Thousands ) Region Q Oct-Nov Average 2008 Northeast South Midwest West

MAPS

Unemployment Rate Seasonally Adjusted by Region Quarter

Unemployment Rate Seasonally Adjusted by Region October & November 2008

Employment Relative Change

Unemployment Relative Change

Employment 5 Best & Worst States

Unemployment 5 Best & Worst States

October & November 2008 Unemployment by State

Changes in U.S. Payroll Employment, Seasonally Adjusted, in Thousands Dec 2007Dec 2008 Absolute Change Relative Change Total Nonfarm 138, , , % Natural Resources and Mining % Construction 7,465.06, % Manufacturing 13, , % Trade, Transport, Utilities 26, , % Wholesale Trade 6,072.95, % Retail Trade 15, , % Information 3,018.02, % Financial Activities 8,252.08, % Professional and Business Services 18, , % Professional and Technical Services 7,820.57, % Management of Companies and Enterprises 1,847.81, % Administrative and Waste Service 8,462.87, % Education and Health Services 18, , % Leisure and Hospitality 13, , % Other Services 5,507.05, % Government 22, , %

Changes in U.S. Payroll Employment, Seasonally Adjusted, in Thousands Q4 2007Q Absolute Change Relative Change Total Nonfarm 138, , , % Natural Resources and Mining % Construction 7,520.76, % Manufacturing 13, , % Trade, Transport, Utilities 26, , % Wholesale Trade 6,072.65, % Retail Trade 15,490.01, % Information 3,022.32, % Financial Activities 8,265.08, % Professional and Business Services 18, , % Professional and Technical Services 7,788.27, % Management of Companies and Enterprises 1,852.91, % Administrative and Waste Service 8,452.27, % Education and Health Services 18, , % Leisure and Hospitality 13, , % Other Services 5,503.05, % Government 22, , %

U.S. Payroll Employment, Seasonally Adjusted, in Thousands Sector Q4 2007Q Absolute Change Relative Change Total Nonfarm 138,031136,033-1, % Total Private 115,740113,523-2, % Goods-Producing 22,04220,844-1, % Service-Providing 115,989115, % Private Service-Providing 93,69892,679-1, % Federal Govt. 2,7282, % State Govt. 5,1415, % State Govt. Education Services 2,3242, % Local Govt. 14,42214, % Local Govt. Education Services 8,0048, %

A Thumbnail Sketch of the Economic Crisis An Economy out of Balance Total GDP 2000 to 2007 $92.5 Trillion Total Purchases of G&S$97.0 Trillion Difference-$4.5 Trillion

How did we purchase more than we produced? Purchased Goods from Overseas U.S. Balance of Trade Deficit increased by about $4.5 Trillion

How did we pay for excess consumption? Household debt doubled by $6.8 trillion Between 2000 and 2005 average home price doubled Almost half of this debt secured by mortgages Savings rate fell to zero

A Housing Bubble “Market Values Fluctuate: Debt is Forever” Unlike equity bubbles housing bubbles quickly convert to spending Banks “make your home work for you” Out of $6.8 Trillion increase in debt, $4.2 Trillion NOT spent on housing Consumer electronics/autos/trucks

Who lent us the money? China, oil producers including Russia and Saudi Arabia These nations purchased U.S. Treasuries-safe and secure Held assets in U.S. banks—swelling domestic banking reserves

How did this fuel borrowing and spending? Large reserves fueled rapid growth in money supply Fractional reserve lending system meant that growth in reserves resulted in large growth in money supply via the money multiplier –result was low interest rates

Federal Reserve Response Fed did nothing Greenspan: World has entered into a “new economic paradigm (rejection of liquidity preference theory and acceptance of the efficient market theory) Prices set in asset and housing markets are ‘correct’

Fed continued Absence of inflation over 2000 to 2005 led to fed to inaction Fed supported rising asset prices Permitted rapid expansion in money supply and declining real interest rates Fueled further increases in housing and stock markets (asset inflation)

What’s different about this downturn? Rise in asset values are based on financiers making increasingly risky loans Banks developed new ways of sell off these risky loans into world markets CDOs Credit Default Swaps Estimated $30 Trillion losses in wealth across the world

How did housing bubble burst? Mortgage loans made to people with no hope of making payments 1. Sub-prime 2. Home equity loans based on assumption of perpetually rising housing prices 3. Teaser rates 4. Home values collapse -down 25 Percent since mid 2006

Problem is now well beyond mortgage backed securities and housing market Commercial lending Credit card lending Auto lending All suffering rising default problems So banking system sharply reduces lending— money multiplier collapses—liquidity trap

Financial meltdown has led to deflation Deflation is a downward pressure on prices that sharply reduces the level of output, employment and income Deflation is a self-reinforcing downward spiral based on future expectations about prices that reflect overall economic conditions