In 2016, I prepared a review of changes in U.S. employment subsequent to the Great Recession of 2007-09, web-link: Post-Recession Winners & Losers. Seven years later, I have now updated the analysis to address strong and lagging sectors of the economy through the COVID pandemic and subsequent recovery. Time period for this review is from 2019 (a peak employment year just prior to the pandemic) to 2022 (with post-pandemic recovery to date).
The story with this update: plenty of change but no huge surprises. With opportunities for again reshuffling the deck of employment winners and losers in the years ahead.
Strong & Lagging Sectors
Strong and lagging sectors of the U.S. economy are visually represented by the following chart. Covered are 12 major non-farm sectors - in terms of current employment size, job change and wage change:
Relative 2022 employment size of each sector is indicated by the size of its named circle/bubble.
Change in employment from 2019-22 is indicated by the X-axis. Sectors to the right of the chart have experienced stronger job growth (numerically) than those to the left with lesser employment growth or job loss.
Hourly wage change is indicated by the Y-axis. Sectors to the top of the chart experienced stronger gains in hourly wage rates than those below — albeit with no accompanying wage data published by the Bureau of Labor Statistics (BLS) for the governmental sector.
Big Picture Look
What the data shows is that the U.S. had a total of 152.6 million non-farm jobs as of 2022. This represents a 1.1% (or 1.7 million job) increase over pre-pandemic (2019) employment of 150.9 million.
Average hourly wage for non-governmental employment has increased by 15% over this same 3-year time period.
Sectoral Highlights
Key highlights are summarized as follows:
Private education/health services represents the single largest sector of the U.S. economy ad of 2022, accounting for 24.35 million jobs followed by professional and business services, then government.
Leisure/hospitality, retail trade and manufacturing and come in at the 4th, 5th and 6th largest sectors. Together the top 6 sectors now account for over 113 million jobs (or 74%) of U.S. non-farm employment.
Net job increases over the past three years are accounted for primarily by two sectors — professional/business services and transportation/warehousing — together representing over 100% of net job growth in three years. Other sectors experienced more anemic job growth including five sectors for which employment had not yet recovered to pre-pandemic levels as of 2022 (meaning continued net job loss).
In terms of pay, the #1 gainer was the relatively small utilities sector — with hourly wages up by about $5.70 per hour over this 3-year time period. Strong gains in dollar terms also are noted for financial and professional/business services — with high percentage increases noted for traditionally lower paid leisure/hospitality and retail sectors.
Taken together, sectors with strong employment and/or wage growth through the pandemic and beyond are professional/business services, transport/warehousing (i.e., the Amazon effect) and financial services. Leisure/hospitality and government are associated with the greatest net job losses with other sectors relatively tightly clustered in terms of employment and wage increases.
Comparison with Recovery from the Great Recession
Key points of comparison with experience of 2010-15 recovery from the Great Recession and more recent experience with the pandemic and ensuing re-normalization through 2022 recovery are noted as follows:
Both then and now the #1 job gainer nationally was with professional and business services. A surprise growth sector through the pandemic was with transportation and warehousing (as the Amazon effect with less brick and mortar retailing).
Leisure and Hospitality (including dining) was a major source of job growth coming out of the Great Recession; employment in this sector has yet to recover from experience of the COVID pandemic and associated business curtailments. Government (federal, state, local) which was losing employment in the 2010-15 period is continuing to shrink its employee job base (not counting contractual services) more recently through 2022.
From a wage perspective, by far the greatest jump in compensation from 2010-15 was experienced by the information sector, notably in software. More recently, the largest pay gains (in $ terms) have been with professional/business and financial services — as well as with the much smaller but high paying utilities sector.
Looking Forward
Whether and to what extent these changing patterns of job and pay persist or shift yet again remains to be seen. Look for potential break-out performances ahead to the mid-2020s for one or more of the sectors near the center of this most recent performance cluster.
Domestic manufacturing may benefit from de-globalization and re-shoring. Information may transition from focus on consumer interests to needs for improved workplace productivity and AI/automation. Health care employment may surge to serve rapid aging of the population, especially if public/private cost and funding issues are better addressed. And construction may benefit from multiple sources — addressing the residential supply gap, renewed industrial investment and/or national energy and infrastructure priorities.
