The year is almost over, which makes now a perfect time to take a look back and see how job growth in the financial industry did compared to other industries. Here’s a look.
The Broad View
Before looking at the growth in jobs in the financial sector compared to all other sectors, here’s a background view on overall job growth in the economy.
The figure here is the year-over-year growth in job growth from 1969 to November 2017. In the current business cycle, employment growth peaked at 2.27% in February 2014. Since then, growth has been a relatively steady deceleration path.
Overall, although growth has been decelerating since 2014, the economy is still adding jobs, and at a fairly healthy pace.
The Financial Industry by Economic Cycle
Shifting now to the financial sector, the following is a look at growth in jobs in the financial industry by business cycle. Each line represents the year in which employment growth peaked and thereafter the economy deteriorated.
Interestingly, the current business cycle (the one that last saw a peak in employment growth in January 2008) is about 120 months “long”, which is quite long by historical standards. The only cycle depicted on the graph to have lasted longer is the 1990s extraordinarily long expansion/boom.
Perhaps surprisingly, the current recovery/boom is the weakest on record. This likely stems from the incredible amount of difficulty the financial industry had to deal with in the aftermath of the housing market-induced global financial crisis.
Where Does Finance Fit It?
Now, shifting to the question of interest – How does the financial industry job growth compare to other industries in 2017?
Interestingly, although probably unsurprising to followers of the reshaping of the American labor market, the industry that has added the most jobs in 2017 so far is Professional and Business Services, with over 500,000 jobs added. In second place is Education & Health, with job growth of around 425,000. Rounding out the top three is Leisure & Hospitality at around 280,000 jobs.
The middle-of-the-road group is Natural Resources (mining, extraction), with job additions of around 250,000. In fifth place is Manufacturing, adding about 180,000 jobs in 2017 so far. And then to the industry of interest – Finance – which has added about 130,000 jobs in 2017 so far.
Industries that have performed weaker than Finance include Trade, Transportation, and Utility; Government, Retail Trade, and Information (Computers/Software).
Overall, not a bad year to be looking for a job in finance, although not incredibly great either.
Conclusion
Perhaps unsurprisingly, job growth in the finance sector recovered slowly following the end of the global financial recession. In 2017, the financial sector grew by about 130,000 jobs. Not incredible, but good enough to place the financial sector around average of all other business sectors.
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