Demand Matters: Unemployment Is Concentrated In Highly Cyclical Sectors Of The Economy

I can't turn this Washington Post chart (pdf) into anything that would be readable on the blog, but the key point is that unemployment hasn't hit all sectors evenly. Construction employment has declined 28.1 percent since the peak, down to 5.5 million jobs. Manufacturing has declined by a smaller percent than that—16.4 percent—down to 11.7 million jobs. Those two sectors are the biggest decliners. By contrast, employment in health care and education services is up 10.4 percent to 19.9 million.

Something that I think is hard to avoid noticing is that these two big loser sectors are the most cyclical parts of the economy. People go to school because they're the right age. People go to the doctor because they're sick. When people become income- or credit-constrained they cut back on buying durable goods or decide not to get the kitchen redone after all.