The Employment Report

The employment report was released today, and both employment and wages rose. As reported by Bloomberg:

American employers added a greater- than-expected 243,000 workers in February and incomes rose, signs the job market will bolster consumer spending and economic growth. ... Wages in the last 12 months rose by the most in more than four years...

Here's a graph of changes in employment in the construction, manufacturing, services, and government sectors since 2000. To make the comparisons easier, the employment dated are normalized to equal one in January, 2000. The dashed line shows constant employment:

Here are the growth rates, which show the same information in a different way:

These graphs do not give a sense of magnitude, i.e. they do not say which of these series contributes the most to employment. Here is the average contribution to total employment for each series since 2000, i.e. the simple average by sector since 2000:

And finally, here are the changes in employment for each sector since 2000. The 2000 start date is chosen arbitrarily, but I think this gives a good sense of what has been happening in recent years:

PGL at Angry Bear comments on the increase in unemployment noted in the report brought about by an increase in labor force participation. Update: William Polley also comments. Update: More detail on the service sector.

Comments

[anon]

The third graph looks like services is giving us the one finger salute. Given what those jobs pay, that's about right...

[Lord]

Given the importance of services, they need to be broken out some. Is it all bar, restaurant, and hotel workers?

[pgl]

Thanks for the mention.

[Mark Thoma]

Lord - good idea. If I can find the time, which is pretty tight today, I will try and do that.

[ken melvin]

Doesn't look very good to me. The ~1 million new construction seems hardly capable of sustaining the economy or of even having caused a surge. The larger, ~7 million, growth in service and govt is about half offset by the loss of ~3.5 million in mfg. Isn't the ~4.5 million net gain low given population growth during the period?

[save_the_rustbelt]

The construction numbers are probably artifically low because illegals are taking over several types of construction work (frame carpentry, drywalling, painting, roofing) in many areas of the country. They are cheap and never call OSHA.

As for the service jobs, repeat after me:

"Fries with that today?"

"Paint brushes are in aisle 14."

"No, for that you need to call India."

"Yes, college did prepare me well for my landscaping business, I am a lawnmower entrepreneur!"

"Rep. Cunningham, I'm here from the lobbying firm, i have your envelope full of 20s."

Not to be sour grapes, but Ohio and Michigan both had net job losses and of course, manufacturing job losses (but our unemployment rates went down, go figure).

[John Dewey]

Rustbelt,

I can understand why you wrote this last post. The mainstream media, with their protectionist and anti-Bush biases, continue to equate service employment with low level retail and labor jobs. Please consider, though, that professional service occupations realized strong growth from 1999 to 2004:

computer/math professions grew by 295K, or 11.2%
healthcare practitioners grew by 357K, or 6.0%
healthcare support grew by 301K, or 10.1%
business/financial grew by 770K, or 17.6%
education/training grew by 547K, or 7.4%

These are professional jobs: doctors, registered nurses, physical therapy assistants, computer programmers, accountants, purchasing agents, teachers, professors, and many others well-paying occupations.

Certainly there was also growth in food service and lawn care. But that's only a small part of the picture.

[yartrebo]

John Dewey, let's see the the number from 2001 to present. Of course throwing in 1999 numbers is going to make things look a lot rosier, as the dot bombs still had 18 months to live.

[Belfour]

That meager monthly report is going to bolster economic growth? Boring, boring, boring. Worthless morons. Either get the clue or get out of the country. I got my shotgun loaded, ready to fire...................

[JohnDewey]

yartrebo,

If you think looking at 2001 data will tell a different story, go to the Bureau of Labor Statistics website and get the data yourself. Don't expect me to do the work to prove some point you wish to make. I'm pretty sure you'll find that the Nov 2004 numbers for those five occupation groups in my post were at all time highs in November, 2004. (2005 data by occupation was unavailable last time I checked.)

It is true that not all service jobs enjoyed steady growth since 1999. Computer jobs may have declined after the overhiring in 2000 before returning to record levels. Pure management jobs dropped by 25%, though I'm not sure how many of these were in the service sector. But most professional occupations did grow consistently throughout the past 5 years, including: healthcare professionals; lawyers and paralegals; physical and bilogical scientists; teachers; and accountants and financial analysts. Transportation workers dipped a bit right after 9/11 when thousands of pilots were furloughed. But the transportation ranks are back to all-time highs. Check out the BLS site if you have doubts.

The point I was making to Rustbelt was that the broad category of service jobs includes much more than foodservice, retail, and lawn care. I wanted to show that the high income occupations within that group made up a lot of the recent growth.

[ken melvin]

"I wanted to show that the high income occupations within that group made up a lot of the recent growth."

Looks like some 1 million or about 20%. Less the nearly half million high tech, its more like 10%. By any standard, it is no where near the some 4.5 million manufacturing job losses. Unless, you'd like to argue that a net gain of a million equals the loss of more than 4 million.