The employment numbers for the past few months have been watched closely, as economists and investors try to gauge the potential recession hitting the economy. If you've read this blog before, you may already know that I'm not that interested in whether the economy technically undergoes a recession or not. A typical recession is just a product of business cycles. Business cycles go up, they get too high and they come back down. There is a growing sense, though, that the downturn hitting the American economy right now may be more significant than just a downturn in business cycles.

In previous blogs, I have pointed out the advantage of the weak dollar for freelancers and small business entrepreneurs capable of hustling abroad. Here, I want to focus on employees.

You've undoubtedly heard about the subprime mortgage crisis and the financial services turmoil on Wall Street. Well, now the bad news has spread to employment. Or the not-so-bad-it-might-be-good news, I should say. The employment numbers that came out for April have generated both optimism and pessimism about the U.S. economy. Each month of 2008 has brought declining employment numbers, with April racking up 20,000 jobs lost in the American economy. If this number sounds high to you, you must not be an economist. Many economists took the 20,000 lost jobs as indication that the economy will be making a come-back relatively soon — since economists had expected a job-loss figure closer to 80,000. As a chief economist at Moody's said to the New York Times, "It strongly argues that this downturn will be mild and short-lived.”

My advice? Don't count on it. While there haven't been a huge number of layoffs so far in 2008, the trend has been towards understaffing. If your income last year relied heavily on overtime or double shifts, be cautious about assuming the same opportunities this year. As the Times pointed out, with oil prices above $115 a barrel, any business connected to fuel consumption is increasingly vulnerable. This means anything from transportation-related manufacturing to trucker-friendly diners.

Much of the attention in macro-economic data is focused on manufacturing reports. The service sector, however, makes up about 70% of U.S. GDP. Service sector includes everything from management consulting to cocktail waitressing. Odds are whatever work that you do falls into the service sector. The pressure on service sector employment is coming not so much directly from input prices (high oil), but from the weakness in the consumer sector (housing crisis). It's unclear still how this economic downturn may effect the larger economy. This financial sense blog does a good job of explaining the links between service sector underemployment, consumer behavior and cheap credit.

If worse comes to worst and your steady job downsizes itself, one option is to embrace freelancing. The New York City subways are full of working-bee adorned posters for the Freelancers Union. It's a great idea, actually: organize freelancers (mostly in computer-oriented work), so that those outside of the traditional 9 to 5 can still get traditional 9 to 5 benefits.

If you have any other ideas about how to make a productive time out of underemployment, please share. Whether you learned to quilt or took off for grad school, let's hear it.