How has financial employment held up during the pandemic?

How has financial employment held up during the pandemic?

Every now and then, we like to take a look at the performance of the financial industry compared to other brought industry groupings. Today’s look goes through October 2020 – the most recent month for which data are available.

As background

As background of the situation, the following looks at the part-time employment picture. With around 6.7 million part-time employees, the picture for employment is improving, although nowhere near where it needs to be. The picture, though, is more positive than some presume by simply comparing the current part-time employment picture with that of the global financial crisis-induced Great Recession. Part-time employment in 2020 has come back much quicker during this so-called recession than it did during the Great Recession.

An industry comparison

With the background set, the following looks at employment by broad industry classifications over the course of 2020. Before looking, could you guess which industries have been hardest hit and which industries have barely missed a beat?

The first look is on an absolute change since December 2019. The table is sorted by best performing to worst performing broad industries.

The results likely present few surprises. The best performing sector was the Federal Government, which has grown its employment base by 146,000 since the end of 2019. The Federal Government is the only broad sector to report growth. Must be nice not to have to worry about balancing a budget!

Interestingly, in second place is Finance. The financial activities sector has only lost 98,000 jobs over 2020. Low interest rates and federal stimulus likely contributed to this picture.

The next best performing industry grouping has been the Construction sector, with employment employ down 210,000 for 2020 so far – and improving.

Shifting to the bottom right portion of the table, employment in the Leisure & Hospitality industry (i.e. hotels, models, travel companies) is down 3,403,000 so far through the first ten months of 2020. The picture is certainly not bright for the tourism industry.

The other two worst performing industries through 2020 have been Education & Health, down 1,205,000 jobs, and Professional & Business Services, down 1,102,000.

The takeaway – it pays to work in the financial industry in a time of economic weakness – at least usually.

The last figure looks at the employment picture on a percentage change basis. The reported percentage change is the percentage change since the end of 2019. Before looking, given what has been presented on an absolute basis, take a guess on the percentage change basis.

Unsurprisingly, the top performing industries on a percentage change basis include the Federal Government (+5.13%), Finance (-1.11%), and Construction (-2.78%).

On the other end, the three worst performing industries include Leisure & Hospitality (-20.28%), Information (-8.71%), and State Government (6.56%).

Conclusion

Overall, on a comparative basis, the financial industry is holding up fairly well. Over the course of 2020, the industry has been a relatively stable source of employment for many millions of global employees. Perhaps it pays to work in the industry that controls all the money?