How Did Financial Employment Do In 2020 Compared To The Other Industries?

March 2, 2021

The American jobs market went through a rollercoaster year in 2020. Leading up to March, forecasters had 2020 on track to be one of the greatest jobs markets on record. Then COVID hit. Unemployment claims soared through the roof. The American economy saw the largest jump in unemployment on record. Forecasters saw a prolonged shutdown that would lead to an incredibly difficult time for many workers.

With this backdrop, one might ask which industries performed the best during 2020. Did the government sector perform well? What about the retail sector? How did tourism employment hold up? Here’s a comparison of how well different sectors did in 2020.

The Sector Look

Before looking at the absolute change in employment by sector over the course of the pandemic, take a guess. Travel down and government up?

Interestingly, although not surprising, the sector that is down the most jobs since the start of 2020 is the Leisure & Hospitality sector, down 3.8 million jobs. Following the Leisure & Hospitality sector is Education & Health, with employment down 1.2 million since the start of 2020. Other industries with employment still down significantly compared to the start of 2020 include local government (down almost 1 million), Trade, Transportation, and Utilities (down 770,000), Professional and Business Services (down 766,000), Manufacturing (down 592,000), Retail Trade (down 392,000), State government (down 286,000), and Natural Resources (down 250,000).

The picture is all completely weak, though. Amazingly, there was one industry that kept adding people to their payroll. Can you guess which industry it was? Perhaps unsurprisingly, it was the Federal government. Since the start of 2020, employment in the Federal government is up 23,000. Perhaps it is useful to have no budget constraints?

How did the Finance industry perform? The next “best” performing industry was the Finance sector. Over the course of the pandemic, the Finance industry has only seen employment drop by 50,000. Low interest rates, massive spending, and other factors contributed to continued demand for financial services.

Source: Econometric Studios, BLS

A Growth Rate View

Some observers might suggest that looking at employment change on an absolute basis might distort the figures because large employment sectors may show larger job losses simply because they employ more people. The following looks at the jobs picture on a percentage change basis since the start of 2020.

The picture doesn’t change much. Interestingly, the Finance sector still shows up as the second best performing broad sector, with employment only down 0.6% since January 2020 and improving every month since April 2020.

Source: Econometric Studios, BLS

Conclusion

Overall, the financial sector held up incredibly well compared to other employing industries. Unless some unforeseen circumstances resurface in the remaining nine months of 2021, this year looks to be a bright year for the American jobs market and, in particular, the financial industry.

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