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NFP: 20 Years of Net Job Creation

Posted By Barry Ritholtz On January 4, 2013 @ 6:45 am In Data Analysis,Employment | Comments Disabled

click for larger chart
[1]
Source: JP Morgan Funds [2]

 

On NFP day, I usually present you with my usual schtick as to why each month’s data point is much less important [3] than is made out. Rather than repeat that yaddayaddayadda again this month, let’s look at the really long term 20 year chart above.

A few things stand out:

• The FIRE economy — Finance, Insurance, and Real Estate sectors — led the growth of jobs over that 2 decade period. Most of these FIRE sectors continue to soften.

• Health Care continues to capture a lot of GDP, and that is reflected in job growth

• Low paying jobs in Leisure & Hospitality is a significant grower

• Manufacturing has been the most negative, shrinking ~5% over the past 20 years. This is the sector that could experience a revival

• Government sector has seen very little growth

Also worth noting: The Labor Force participation rate has now fallen back to 1985 levels — that is pre-tech boom, and before the bulge of FIRE hiring occurred.

When today’s NFP is released, instead of having a kneejerk reaction to the preliminary soon-to-be=revised data, consider putting it into the context of the longer term, bigger picture.

 

BLS data [4] released at 8:30am
http://www.bls.gov/ces/

~~~

Previously:
NFP Day: The Most Over-Analyzed, Over-Emphasized, Least-Understood Data Point [3] (February 4th, 2011)


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2013/01/nfp-20-years-net-job-creation/

URLs in this post:

[1] Image: http://www.ritholtz.com/blog/wp-content/uploads/2013/01/net-job-change.jpg

[2] JP Morgan Funds: https://www.jpmorganfunds.com/cm/Satellite?UserFriendlyURL=diguidetomarkets&pagename=jpmfVanityWrapper

[3] each month’s data point is much less important: http://www.ritholtz.com/blog/2011/02/nfp-over-over-least/

[4] BLS data: http://www.bls.gov/ces/

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