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Posts tagged with: "USFIRE"

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The largest changes in payroll employment

Comparing April 2020's social distancing and August 1983's AT&T strike

The April 2020 changes in payroll employment are unprecedented in scale, but their nature is familiar.

The FRED graph above shows the monthly percentage change in payroll employment across all service-providing industries since 1939. Although the most recent reduction in leisure and hospitality employment (the red bar on the far right edge of the graph) has been the largest, both in magnitude and in proportion to the size of the industry’s labor force, we can compare it to a somewhat similar event: the American Telephone & Telegraph Co. union workers’ strike of August 1983 (the blue bars at the center of the graph).

Both reductions in employment were orchestrated: In 1983, the labor stoppage was to achieve better working conditions; in 2020, the labor stoppage has been to slow the spread of the COVID-19 pandemic.

The flip side of an organized labor stoppage is the organized nature of its recovery. In the case of the striking telephone workers, employment rebounded the following month. Alas, it’s too early to know if or when scaling back social distancing will produce a similar recovery in employment. Check FRED on June 5, 2020, at 8:30 AM (CST) to see the next changes in payroll employment.

How this graph was created: From FRED’s main page, browse data by “Release.” Search for “Employment Situation” and from “Release Tables” click on “Current Employment Statistics (Establishment Data).” From the table, select each of the nine industries in the private service-providing sector and click “Add to Graph.” From the “Edit Graph” panel, use the “Edit Line” tab to change the units to “Percent Change” and click “Copy to All.”

Suggested by Diego Mendez-Carbajo.

View on FRED, series used in this post: CES4300000001, USEHS, USFIRE, USINFO, USLAH, USPBS, USSERV, USTRADE, USWTRADE

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 financial sector becoming more productive?

The Great Recession adversely affected employment across all industries. Since the recovery began in 2010, employment has rebounded and the unemployment rate started declining. But this recovery in employment has not been uniform across industries.

Employment in the financial sector has steadily declined as a share of total employment since the onset of the Great Recession. The financial sector averaged around 6.2% of total employment in the ten years preceding the Great Recession, from 1997 to 2007; in the recovery period, from 2010 to 2018, it averaged around 5.7%. It’s also interesting, but perhaps not very surprising, to note that the employment share in financial activities increased through the previous two recessions—in 1991 and in the early 2000s—but fell quite a bit during the Great Recession. And while total employment has grown by nearly 14% in the years spanning the recovery, from 2010 to 2018, financial employment has grown by only 11%.

So the question is, if there are fewer employees in the financial sector relative to the 1990s, how is that impacting output? One way to answer this question is by looking at the value added by the financial industry. The red line on the graph represents value added. It is interesting to note that while value added declined during the recession, it recovered shortly thereafter and has been on an upward trend since then. This implies that industry output has not declined because of slower employment growth, which in turn indicates that other factors must be responsible for this apparent increase in the productivity of labor.

How this graph was created: Search for and select the series USFIRE. From the “Edit Graph” panel, select a quarterly frequency and set the aggregation method to “Average.” Then add the series “PAYEMS” to the same graph and set the formula as a*100/b. Click on the “Add Line” option and search for the series “VAPGDPFI.” In the “Format” tab, scroll down to the formatting options for Line 2 and set the y-axis position to “Right.”

Suggested by Asha Bharadwaj and Miguel Faria-e-Castro.

View on FRED, series used in this post: PAYEMS, USFIRE, VAPGDPFI

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