December Net Jobs Gain For Securities?!

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Securities industry employment in the U.S. edged higher last month, according to Labor Department data. That result is at odds with ubiquitous reports of layoffs and limited hiring, and with the direction of overall U.S. payroll employment, which declined sharply in December for a fourth straight month.

Including a reported gain 200 jobs last month on a seasonally adjusted basis, nationwide payrolls within "securities, commodity contracts (and) investments" shed a total of 5,600 in the fourth quarter, or 0.66 percent of the September figure of 851,500. That's only about half the pace at which the U.S. economy as a whole has been erasing jobs: Total U.S. nonfarm payrolls declined by 1.53 million in the fourth quarter, or 1.12 percent.

Even the broad financial sector, which includes real estate operation and mortgage lending, outperformed the overall economy in terms of job preservation last quarter. The official payrolls data show that 69,000 jobs were lost in "financial activities," or 0.84 percent of September's seasonally adjusted figure. About half those losses occurred within "credit intermediation and related activities," and most of the rest fell within real estate and rental leasing.

Securities industry employment in New York City fell by 1,400 jobs in November and 800 in October. (State and metropolitan area figures aren't seasonally adjusted and are reported one month after the nationwide numbers, so the New York December payrolls are not available.)

The city's November total of 170,100 securities jobs is down 21,700 or 11.3 percent, from the cycle peak reached in August 2007. During the last down cycle from 2001-2003, New York securities employment shrank by 41,300, or 20.6 percent.

So, What Gives?

We're not economists, so we don't know why the official data on securities employment appears so much less bad than anecdotal evidence (not to mention common sense) would indicate. Technical issues related to the government's collecting, seasonally adjusting and revising the data could be a factor. In contrast to the nationwide report - which showed big downward revisions to the previous two months' numbers - October and November employment in securities and some other finance sub-sectors was revised upward. (Some economists expect further large revisions when the December numbers get revised next month.)

Another conjecture is that massive government lending and capital injections to the industry - which scaled up dramatically since September - helped cushion payrolls in securities and other beleaguered parts of the finance world. However, we're wary of endorsing that idea at such an early stage.

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