Skip to main content
The FRED® Blog

Posts tagged with: "CES0800000001"

View this series on FRED

Social distancing and employment loss in leisure and hospitality

The FRED Blog has used the Current Employment Statistics from the Establishment Data Survey from the Bureau of Labor Statistics before. Past posts cover the ups-and-downs of payroll employment in the information industry and the increasing proportion of women in the workforce.

Today, we use that rich data source to learn more about the reduction in overall payroll employment in March 2020—the first reduction in ten years.

The FRED graph above compares the job losses in the goods-producing industry (mining & lodging; construction; and manufacturing) with the job losses in the service-providing industry (trade, transportation & utilities; information; financial activities; professional and business services; education and health services; leisure and hospitality; and other services).

The bulk of the recent reduction in payroll employment occurred among service-providing activities; during the onset of the 2007-2009 recession, the largest reductions in payroll employment took place among goods-producing activities.

The social distancing to manage the COVID-19 pandemic has changed the routines of millions of people, and their use of services has changed. The FRED graph below shows the change in employment for service-providing industries. These changes are presented in percentages to let us compare sectors of different size.

The loss of employment in leisure and hospitality has been the largest: They represent almost 3% of the employed workers in the industry and 65% of the overall reduction in payroll employment. Restaurants and bars are either exclusively offering take-out or temporarily shutting down, so some decline was expected.

How these graphs were created: From the FRED home page, browse data by category by clicking on the “Release” category. Search for “Employment Situation” and select “Current Employment Statistics (Establishment Data).” Click on “Table B-1. Employees on nonfarm payrolls by industry sector and selected industry detail, Not seasonally adjusted.”

For the first graph, select the following series by clicking the box to the left of their names: Goods-producing; and Private service-providing. Click “Add to Graph.” From the “Edit Graph” panel, change the units to “Change” and the format to “Bars,” selecting “Stacking > None.”

For the second graph, select the following series by clicking the box to the left of their names: Trade, transportation, and utilities; Information; Financial activities; Professional and business services; Education and health services; Leisure and hospitality; and Other services. Click “Add to Graph.” From the “Edit Graph” panel, change the units to “Change” and the format to “Bars,” selecting “Stacking > Normal.”

Suggested by Diego Mendez-Carbajo.

View on FRED, series used in this post: CES0800000001, USEHS, USFIRE, USGOOD, USINFO, USLAH, USPBS, USSERV, USTPU

Is the decline in manufacturing economically “normal”?

Deciphering the phases of economic development

The FRED graph above tracks the proportions of employees working in three industries—construction, mining and logging, and manufacturing—since 1939. Construction (the blue line) has remained roughly horizontal. Mining and logging (the green line) has steadily declined. And manufacturing (the red line) has noticeably declined as well. This trend may look like weakness for the U.S. economy, but is it something to worry about?

Let’s take a step back: Historically, economic development has led to a declining share of workers in goods-producing sectors. The first sector to decline is agriculture,* whose workers moved to manufacturing and mining during the Industrial Revolution (which pre-dates our graph by a century or so). In the 19th century and beyond, the U.S. economy grew further and progressed to the next phases of development, with mining and manufacturing losing relative importance.

So if the U.S. economy is growing, where is it growing? The graph below shows the service sector has taken up the slack. At the start of the graph, in 1939, this sector had already made up 50% of non-farm employees, and it has continued to grow. The remaining sector, government, has remained relatively flat over the 80 years of this data series. Clearly, the U.S. economy is now much less focused on “making things.” Rather, the emphasis is now on education, health, leisure, retail, information, and finance.

How these graphs were created: Search the Current Employment Statistics release table and choose Table B-1 (seasonally adjusted); select the series you want and click “Add to Graph.” From the “Edit Graph” panel, for each line add series “All employees, non-farm” and apply formula a/b*100.

*Why don’t we show agricultural employment here? For one thing, it’s really hard to count: Many are part-time/seasonal workers and relatives that work on family farms.

Suggested by Christian Zimmermann.

View on FRED, series used in this post: CES0800000001, MANEMP, PAYEMS, USCONS, USGOVT, USMINE

The rise of the service economy

One constant throughout economic history is that, as an economy develops, its service sector keeps growing. The graph shows that this is certainly true for the United States. It divides nonfarm payrolls into three categories: government (at all levels), goods-producing industries (mining, manufacturing, construction…), and service-providing industries. Although government is roughly constant, services have far surpassed goods.

Is this bad? Of course not. The standard of living has clearly improved since 1939, when the graph starts. Indeed, goods can now be produced with fewer people—thanks to technological progress and automation…and perhaps also automatization. This transformation allows the economy to direct more of the labor force to enhancing our lives in other ways, such as tourism and entertainment, advanced health care, and anything related to the Internet, all of which are services that were either nonexistent or luxuries in 1939.

How this graph was created: Using the nonfarm payrolls by industry sector release table from the establishment survey, check the series and click “Add to Graph.” From the “Edit Graph” panel, open the “Format” tab and select graph type “Area” and “Stacked.”

Suggested by Christian Zimmermann.

View on FRED, series used in this post: CES0800000001, USGOOD, USGOVT


Subscribe to the FRED newsletter


Follow us

Back to Top