Employment by sector

Economies rarely look the same after a recession. So where are the jobs being created?

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As the US economy continues to work its way through the aftermath of the Great Recession, the focus remains on job creation. Four-and-a-half years later, overall employment is still 851,000 below its prerecession peak. However, the jobs picture is anything but monochromatic; even as some sectors remain far below their prerecession employment levels, other sectors are experiencing strong job growth. The differing employment situations are, in large part, due to the resumption of long-term trends that were in place prior to the recession. A comparison of prerecession employment levels and current employment numbers provides insight into where job creation can be expected.

As shown in table 1, health and social services, leisure and hospitality, and business and professional services are the three sectors where employment increased the most from prerecession levels while also expanding their share of total employment. Together, these sectors have increased employment by more than 4 million since the December 2007 start of the recession. Each of these sectors was on an upward trajectory before the recession and should continue to produce higher-than-average employment gains.

An aging US population will likely beckon faster-than-average employment growth in the health and social services sectors.
A growing retiree population, rising tourism, and changing lifestyles (fewer home-cooked meals, for example) suggest that employment growth will remain strong in the leisure and hospitality sectors.
Business and professional services employment should also enjoy faster-than-average growth as other industries continue to limit their own employment growth by contracting noncore services to outside experts.

Other notable employment gainers include private education services, which continued an upward trend that started before the recession, and mining, which is enjoying the fruits of growing energy production.

The manufacturing and construction sectors have experienced the greatest employment losses since December 2007, but their prognoses are different.

As firms increasingly view the United States as a cost-effective place to operate, manufacturing output will continue to rebound, but it will not be a major driver of employment growth because productivity continues to improve.
The outlook for construction is different. Although it is unlikely (and even undesirable) for employment in construction to return to its prerecession level, as the overall employment situation continues to improve, the construction sector stands to benefit from considerable pent-up demand. The US population has been growing more rapidly than housing units throughout the downturn, and at some point, supply will need to catch up.

Government is another sector where employment remains substantially lower than its prerecession levels. Employment at the federal, state, and local levels are all lower, but the local level, which accounts for 64 percent of government employment, has suffered 79 percent of the job losses.

While they have not reached their December 2007 levels, wholesale trade, retail trade, and transportation and warehousing are all on an upward trajectory. Employment in the utilities sector has been flat over the last three years, and absent a major federal infrastructure initiative, it will likely remain so. Information and financial service employment will continue to be limited by productivity improvements and consolidation.

Table 1: Employment by sector

	Dec-07	Jan-14	Change		Dec-07	Jan-14		Percentage point change
	In thousands				% of total nonfarm employment
Nonfarm	138,350	137,499	−851
Private	115,974	115,686	−288
Mining and logging	740	890	150	Mining and logging	0.5%		0.6%	0.1%
Construction	7,490	5,922	−1,568	Construction	5.4%		4.3%	−1.1%
Manufacturing	13,746	12,075	−1,671	Manufacturing	9.9%		8.8%	−1.2%
Wholesale trade	6,038	5,810	−228	Wholesale trade	4.4%		4.2%	−0.1%
Retail	15,571	15,260	−311	Retail	11.3%		11.1%	−0.2%
Transportation and warehousing	4,548	4,563	15	Transportation and warehousing	3.3%		3.3%	0.0%
Utilities	557	550	−8	Utilities	0.4%		0.4%	0.0%
Information	3,024	2,679	−345	Information	2.2%		1.9%	−0.2%
Financial	8,281	7,900	−381	Financial	6.0%		5.7%	−0.2%
Professional and business services	18,051	18,866	815	Professional and business services	13.0%		13.7%	0.7%
Education services	2,976	3,351	374	Education services	2.2%		2.4%	0.3%
Health and social services	15,578	17,877	2,299	Health and social services	11.3%		13.0%	1.7%
Leisure and hospitality	13,550	14,461	911	Leisure and hospitality	9.8%		10.5%	0.7%
Other services	5,516	5,484	−32	Other services	4.0%		4.0%	0.0%
Government	22,376	21,813	−563	Government	16.2%		15.9%	−0.3%

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Behind the Numbers , Economics

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