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Economic Impact: Regaining Jobs Lost in Recession

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Now that employment is growing again, people are starting to ask how long it will take the nation to regain the jobs lost during the recession.
The potential outcomes are not encouraging.

About 8.4 million people lost their jobs in the nation since the recession started in December 2007. Net employment has grown by 723,000 jobs since hitting a low in December 2009.

If the economy continues to grow at the sluggish rate of an average 90,000 jobs a month that has occurred since December, it will take seven years to get back to the previous peak of 138 million jobs in the nation.

A job gain of 130,000 per month that occurred in the five years before the recession would get the nation back to the previous peak in nearly five years.
On a more positive note, if we replicated the 200,000 monthly averages from when the economy was growing robustly in the 1990s, we’ll hit the previous peak in a little more than three years, or by late 2013.

In fact, employment in the nation grew at a pace of about 200,000 per month from December 2009 to May before employment contracted slightly during the summer months.

Virginia is faring much better than the nation. The state shed 197,000 jobs during the recession and started growing in February.

Since then, employment increased by almost 54,000 through June, but we’re still short about 143,000 to get back to the 3.78 million peak of April 2008.
An average growth rate of 13,000 jobs a month that occurred during the past four months would put the state back to parity in a little less than a year.
This would be better than in the nation if trends hold; but as usual, none of the metropolitan areas in the state is likely to experience the state average.
In fact, the Northern Virginia metropolitan area accounted for 40 percent of the jobs created in the state during the past four months.

Moreover, Northern Virginia lost only 41,000 jobs during the recession and has already added a net gain of 22,000 jobs since hitting a low point of 1.28 million jobs in February.

At this rate, Northern Virginia will be back to its previous peak by the end of the year.

The Richmond metropolitan area is another story.

Richmond lost 42,000 jobs after peaking at 635,000 in June 2007. Since hitting bottom in February, the region has added 5,000 jobs through June. At this pace, it will take nearly 2½ years to reach the prior peak.

Reprinted with permission from the Richmond Times-Dispatch

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