The global economy is in a terrible hole. After the longest expansion on record, global growth may drop by 40% in the second quarter of 2020 (annualized). Obviously, that decline is showing up everywhere, including the jobs market. The drop in employment over the past couple of months has virtually eliminated all employment growth the U.S. had seen this century. What a way to start a century!
The drop in employment is, unsurprisingly, uneven across industries. In this vein, how has the financial industry held up? Has it done better in 2020 than other industries? Here’s a look.
Breaking Down the Jobs Picture by Industry, % Change
First up, a look at the percentage change in employment by sector in the U.S.
Each row in the following figure is the broad industry. Each column is the percentage change for the first four months that the Bureau of Labor Statistics (BLS) has reported. The chart is sorted from worst to best performance for the month of April (reported on May 8th).
The industry with the worst performance was Leisure & Hospitality at a whopping -48%. If one includes the 2.5% drop in March, more than half of all employees in the Leisure & Hospitality Industry have lost their jobs.
The second hardest hit industry is Retail Trade at -13.7%, followed by Construction at -12.2%, Natural Resources at 11.9%, and Trade, Transportation, and Utilities at -11.1%. Simply terrible.
On the other end is the Federal Government, the only broad sector to have seen an increase in employment in April. Federal employment rose 1.4% in April, up slightly from March’s count.
Where does the financial industry fall? As a positive signal, jobs in the financial industry only dropped by 2.7%, the second “best” performing broad sector in April. The financial industry even performed better than state and local government employers, which saw their employment base drop 4.0% and 5.3% in April.
If you happen to have a job in the financial industry, you should definitely count yourself as lucky.
Breaking Down the Jobs Picture by Industry, Absolute Change
How do the figures look on an absolute basis? The following figure has that look.
Consistent with the prior view, the Leisure and Hospitality industry has lost the most jobs, down more than 8 million over March and April.
Other top five “losers” of the COVID-19 pandemic include Trade, Transportation, and Utilities at -3.1 million jobs over the March/April period, Education and Health Services at -2.6 million, Professional and Business Services at -2.2 million, and Retail Trade at -2.1 million.
On the other end, Federal employment grew by just 20,000 jobs in March and April, while state government employment dropped by 180,000, and the Information sector shed 258,000.
Where does the financial industry show up? In March and April, financial firms saw employment decline by 265,000 – not bad on a relative basis. Again, it’s a good time to be a professional in the financial industry.
Conclusion
Overall, the financial industry is doing relatively well compared to job losses in other industries. This is likely unsurprising given the relatively stable nature of the industry.
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