Friday’s employment report out of the Bureau of Labor Statistics (BLS) showed a white-hot American labor market. June’s employment growth jumped +287K, a gigantic jump from the +38K of the prior month.
In looking at financial industry employment, the picture is certainly strengthening as well. During June, financial industry employment gained 16,000; for the year so far, the industry is up about +90K jobs. Healthy, but not “bubbling.”
Interestingly, employment in the sector is still about 120K away from its all-time high of about 8.4 million at the end of 2006. It’s getting there, just perhaps too slowly for an industry used to fast ups and downs.
How do the data look by sectors? This detailed look follows.
Source: Quandl, Bureau of Labor Statistics
The Four Broad Sectors the BLS Releases
The BLS reports four non-insurance, financial industry sub-sectors. These sub-sectors are monetary authorities (i.e. central banks), depository credit intermediation (i.e. banks), commercial banks, and securities, commodity contracts, investments, and funds and trusts. We’ll take a look to see which of the four is performing the best.
Monetary Authorities
Beginning first with the devils, also known as the central bankers.
The picture of employment at central banks isn’t pretty. Employment at America’s central banks peaked in mid-2003 at about 23K. Since the post-technology bubble peak, employment at monetary authorities is down about 5K to just under 28K.
It also doesn’t look like employment at central banks is going to make a roaring comeback anytime soon, having been in a growth rut for the past couple of years.
Source: Quandl, BLS
Depository Credit Intermediation (Banks)
Shifting now to the entities most individuals think of as the definition of financial – banks. Overall, the view over the past 16 years is pretty sobering. The sector had a strong run-up prior to the housing market collapse, and since has had a difficult time recovering the jobs lost. With that said, and acknowledging that the industry is still 140K jobs under water compared to its all-time peak, growth is beginning to come back.
Through the first half of 2016, banks have added jobs. Not amazing, but moving in a growth direction.
Sources: Quandl, BLS
Commercial Banks
Moving to commercial banks, here’s how they look.
The picture is similar to the retail banking picture above. Recently, there’s been some sign of life in the sector, but certainly not a strong pulse.
Source: Quandl, BLS
Securities, Commodity Contracts, Investments, and Funds and Trusts
Lastly, to the investment universe.
Interestingly, of the four sectors addressed here, the strongest of the four is securities, commodities contracts, investments, and funds and trust. Employment in the industry has already past its peak employment peak, and the sector is showing no signal that growth is going to slow down.
Sources: Quandl, BLS
Conclusion
Overall, although growth is certainly not even across the financial industry, employment of financial professionals is coming back.
Of the four “detailed” sectors the BLS releases data on, the strongest is the securities, commodities contracts, investments, and funds and trusts, with the sector already past its prior business cycle peak. It is the only sector that can boast such an accomplishment.
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