The increase in unemployment during December 2007 – October 2009 (5.1 percentage points) was the largest such increase when compared to the previous five recessions. The US Bureau of Labor Statistics (BLS) estimates that 8.4 million jobs were lost since the start of the recession. In terms of duration, the recent recession was also the longest since World War II lasting 18 months (see National Bureau of Economic Research).
According to the Pew Research Center’s June 2010 report: “A Balance Sheet at 30 months: How the Great Recession Has Changed Life in America”, more than half of all adults in the US labor force reported a spell of unemployment, a cut in pay, a reduction in hours or an involuntary shift to part-time work since the Great Recession began in December 2007. The Pew survey also found that since December 2007, a new frugality characterizes the spending and borrowing habits of Americans (62 percent have cut back on spending) and a diminished set of expectations about their financial future and that of their children. They found a widespread concern that it will take several years to recover family finances and housing values. Moreover, studies in the US show that the earnings loss can last even 15-20 years after job separation. Massive layoffs lead to health consequences, such as stress-related illnesses in the short run and higher mortality rates for laid-off workers in the long run.
Employment growth has weakened and remains well below crisis levels while corporate profits have gone back to pre-crisis levels while business investment remains low. The path to recovery lies in moving to a comprehensive job plan.