Chart of the Day 01/07/2011
Non-Farm Payroll Gains Per Decade
Today's chart of the day displays nonfarm payroll gains reported on a per decade basis, up through the data released 01/07/2011.
As you'll see in the chart below, the number of job gains during the 2000 decade was actually negative.
I think if the data was broken down even further, we'd see that the 2000 decade was actually on track for a considerable jobs growth up until the last few years.
I decided to take a look at percentage gains in the DJIA for the 1990 decade as compared to the 2000 decade to see if there may be a correlation with jobs growth:
- At the beginning of 1990 the DJIA was at 2810 and finished the decade in 1999 at 11,497. The 1990 decade finished with an approx. 20% gain in nonfarm payroll job growth and a 309% gain in the DJIA.
- At the beginning of 2000 the DJIA was at 11,497 and finished the decade in 2009 at 10,428. The 2000 decade finished with an approx. 2% loss in nonfarm payroll job growth and just over a 9% loss in the DJIA.
While not a 1-to-1 correlation, the above does seem to stress the importance of continuing to work towards improving job growth on an ongoing basis for long term market gains.
Today (01/07/2011), the Labor Department reported that nonfarm payrolls (jobs) increased by 103,000 in December. For some perspective, today's chart illustrates the percent increase in the number of jobs for every decade since the 1940s (the data goes back to 1939).
Today's chart illustrates that up until this millennium, the number of jobs at the end of a decade has always been at least 20% greater than 10 years prior.
During the last decade, not only was that 20% plus growth not achieved, the decade actually ended with less jobs than when it began. This negative job growth is particularly noteworthy due to the fact that the US population had increased by 10% in addition to a significant increase in global wealth during the same time frame.
With one year down in the current decade (see gray column), today's chart illustrates that job growth is positive albeit only slightly so. If job growth during the current decade were to increase at the same pace as what occurred during the first year of this decade, the decade would end with an 8.7% gain in jobs (see gray dot). This is certainly better than the decade just passed, however, it is well off the 20% plus pace of decades past.