Structural Changes in Jobs

By Andrew Paparozzi
In July 8, 2008

Will recent job losses reverse themselves once the cyclical downturn in the economy ends? According to the latest report from the Bureau of Labor Statistics (BLS), the economy has shed 438,000 nonfarm payroll jobs in the first half of 2008, virtually wiping out all of the increase during the prior six months. On the surface, it would appear that the January-June job losses were concentrated in construction (-261,000) and manufacturing (-235,000). However, the impact of the weak economy on jobs is being felt across the board. Other sectors recording large job losses during the first half of the year included retail trade (-162,000) and professional and business services (-200,000).

But the weak economy isn’t the only influence on job totals. Even in sectors experiencing job gains such as leisure and hospitality (88,000), education and health services (262,000), and government (126,000), we know that adjustments are taking place—adjustments not only to weaker demand, but also responses to higher costs, particularly energy.

The latter are structural in nature—companies altering their operations to achieve greater productivity and reduce costs. While net job creation will no doubt resume at some point after the economy rebounds (remember labor markets are a lagging indicator), many of the structural changes are here to stay, or at least will be with us quite a bit longer.

Joseph Vincenzino

Andrew Paparozzi

Epicomm's Andrew Paparozzi, Vice President/Chief Economist, is well-known for his accurate and thoughtful discussions on the economy and US commercial printing industry. A foremost author and speaker on economic business trends in the printing industry, Paparozzi heads Epicomm's Printing Economic Research Center.

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