Job Cuts May not Get Too Deep

Friday, the Bureau of Labor Statistics is due to release its reading on April unemployment and nonfarm-payroll growth. Economists, on average, figure the unemployment rate edged up to 5.2% and payrolls shrank by about 85,000 jobs. In past recessions, job losses have eventually gotten much more severe, marked by nationwide cuts reaching 300,000 or more per month. This time -- and these are dangerous words -- maybe it is different. In the past 10 business cycles, year-over-year growth in payrolls has averaged 3% in the 12 months leading up to a recession. Twelve months before payrolls peaked this time around, job growth averaged just 1.5%. That could mean there's not a lot of payroll fat to be trimmed in this downturn. It could explain why weekly claims for unemployment benefits still haven't climbed to 400,000, the level associated with recessions.