The jobs market looks good. In 2016, the U.S. economy created about 2.2 million jobs. That’s slightly lower than the 2.7 million in 2015 and 3.0 million in 2014.
Wages, a laggard in the current economic boom, are also starting to show up stronger. Wages accelerated to 2.8 percent year-over-year growth in 2016, a fairly healthy strengthening from the 2.2 percent in 2015 and around 2.1 percent in 2014. Overall, the picture looks to be improving for the American worker.
How does the financial industry compare? Here’s a look.
Setting the Backdrop
First, before going into the detailed employment comparisons, here’s a reminder of the financial industry’s employment picture by economic cycle. In the following graphic, each line is labeled by the peak in an economic cycle’s employment measure. The x-axis is the number of months since the prior cycle’s peak; the y-axis is the percentage change since the prior cycle’s peak. For example, the 2008 line means that US employment peaked in 2008, that we’re 109 months beyond the pre-housing bubble bursting (January 2008), and that the financial industry employment count is about 1.6 percent higher now than it was in January 2008.
Perhaps the most apt word to describe this picture is – sobering. The bursting of the housing bubble hurt the financial industry hard, and it’s taken a long time to get back all those jobs that were lost. But, the industry is back – the industry now has 1.6 percent more employees now than it did back then.
Source: BLS, Econometric Studios
The Jobs Picture by Sector
With the sobering picture behind us, here’s a look at the jobs picture by sector from 2015 through the first couple months of 2017.
Of the broad industry classifications reported by the Bureau of Labor Statistics (BLS), the top job gaining industry – on average – in 2016 was Financial Activities, with an average monthly employment of 162,417 higher than in 2015. So far through the first couple months of 2017, employment in the Financial Sector is up 114,667. Healthy, but not bubbly (i.e. not housing bubble type of growth).
How does the financial industry compare?
Well, not too bad. Of the 8 industries shown, job growth in the Financial Activities sector comes in fourth at about 2 percent year-over-year growth. The 3 industries to best the financial sector were Leisure and Hospitality (3.0 percent), Education and Health Services (2.7 percent), and Professional and Business Services (2.6 percent). Not bad, not bad at all. And, so far in 2017, job growth in the financial industry is up to third (1.4 percent), behind Mining and Construction (up 1.9 percent), and Professional and Business Services (1.7 percent).
Source: BLS, Econometric Studios
The 2017 Picture
What does this picture mean for 2017? Well, with wages accelerating to healthy levels and month over month job growth still strong, the financial sector appears poised to be a leading job gainer for the remainder of 2017.
Conclusion
Overall, job growth in 2016 was healthy, and all indications of 2017 so far suggest the US labor market will continue to be kind to the American worker in 2017.
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