Industrial Analysis

by Jerry Brown - jerry.brown@state.mn.us 
August 2010

Monthly analysis is based on seasonally adjusted employment data.
Yearly analysis is based on unadjusted employment data.*

Overview

Monthly growth in employment for July 2010 was estimated to be a robust increase of 9,800 jobs. This reflected quite strong growth in the private sector, which was partly offset by losses experienced in government employment. The breadth of the positive report is reflected in the fact that all private industry supersectors added jobs for the month. The largest gains were in educational and health services, up 5,500, and professional and business services, up 4,300. Other large gains came in leisure and hospitality, other services, and manufacturing with gains of 2,900, 2,400, and 1,300, respectively. Government employment fell precipitously, down 9,100. The strong growth for the month combined with relatively weak results for the previous July caused the rate of annual growth to jump to 1.1 percent. Six of the 11 supersectors showed gains compared to last year with the largest gain in leisure and hospitality where strong results in recent months have pushed annual growth to 15,200. Large annual increases were also present in educational and health services, up 14,200, and in professional and business services, up 11,100.

Mining and Logging

Mining and logging employment increased 100 for the month, marking a third increase in the past four months. Growth over the past year was still slightly negative despite the recent growth.

Construction

Construction employment gained 600 jobs in July to post the first employment increase since January. Most of the gain was from strong results in specialty trade contractors. Compared to last year, employment showed a loss of 6,500. Specialty trade contractors showed an annual loss of 7,800, and construction of buildings declined 1,300. This was partly offset by gains of 2,600 in heavy and civil engineering construction.

Manufacturing

For the sixth time in 2010 manufacturing industries experienced a monthly increase in employment. The monthly gain of 1,300 was largely caused by 1,100 jobs added to durable-goods manufacturing. Among durable-goods industries, fabricated metal manufacturing showed strong growth with computer and electronic product, transportation equipment, and furniture manufacturing also posting positive results. Compared to last year the supersector added 3,000 jobs in July after posting an annual gain for the first time in June. Most of the annual gain came in durable goods although nondurable goods also increased 900.

Trade, Transportation, and Utilities

A seasonally adjusted increase of 900 jobs over the past month boosted trade, transportation, and utilities. Of the three major components, retail trade added the most jobs for the month, up 1,300, led by general merchandise stores, building material and garden equipment and supplies retailers, and grocery stores. Wholesale trade added 900 jobs with all of the gain coming in durable-goods wholesaling. These gains were largely offset by a loss of 1,300 in transportation, warehousing, and utilities. The annual rate of growth for the supersector was 0.5 percent. This is the first annual gain posted since the end of 2007. Retail trade showed a gain of 3,600 with general merchandise stores adding 3,000 jobs. Wholesale trade also added 1,200 jobs with nearly all of the gain in durable-goods wholesalers. On the negative side, transportation and warehousing posted a loss of 2,600.

Information

Employment was up 200 for the month in information with the gains coming in publishing. Compared to last July the supersector showed a gain of nearly 200. With losses of 800 in publishing industries and 100 in telecommunications, all of the annual gain came in industries for which estimates are not available.

Financial Activities

Financial activities employment was up 700 for the month of July with 400 new jobs in finance and insurance and 300 from real estate and rental and leasing. Credit intermediation industries showed a small improvement for the month as did real estate. Over the past year the supersector showed a loss of 1,600 jobs, a rate of change equal to -0.9 percent. The only positive annual change was in insurance carriers. The most substantial loss was in securities, commodity contracts, and other related where a loss of 1,500 occurred. There has been some improvement in over-the-year growth the past three months as the rate of loss improved from April’s -2.5 percent to July’s -0.9 percent rate.

Professional and Business Services 

One of the largest employment gains for the month came in professional and business services with an increase of 4,300. Each of the three major components showed gains for the month with administrative and support leading the way with a gain of 2,500 mainly in employment services. The gain of 1,100 in professional and technical services was spread among its component industries, but architectural, engineering, and related services provided a somewhat stronger boost to employment growth than other industries. The gain in July breaks a string of losses going back to March. The current gain combined with growth from last fall and winter produced an annual rate of gain equal to 3.6 percent, up from 2.7 percent in June and equal to 11,100 jobs. All of this gain came in administrative and support and waste management services, which added 12,700 jobs. This gain was partly offset by losses elsewhere. The strongest area of growth was in employment services, up 13.5 percent.

Educational and Health Services

The largest monthly gain in July came in educational and health services, which added 5,500 jobs. A large part of this gain was from substantially reduced seasonal declines among colleges and universities, which helped push growth in private education to 3,800 for the month. It is possible that the seasonality may simply be delayed in which case we would expect larger-than-usual declines in August estimates. Health care and social assistance also added 1,700 jobs. Growth in health care and social assistance came mainly in ambulatory care and to a lesser degree social assistance. Growth in these areas erased substantial losses in hospitals and in nursing and residential care facilities. The monthly results helped continue the improvement in annual growth, which measured 3.2 percent, for the supersector. The rate of growth has improved steadily since April when growth measured 0.9 percent. Private educational services was up 10.4 percent with private colleges and universities producing the greatest part of this gain. Health care and social assistance added 8,800 jobs with more than half of the gain coming from social assistance. Hospitals showed a small loss over the year.

Leisure and Hospitality

Leisure and hospitality posted a fifth consecutive monthly job gain in July, adding 2,900 jobs for the month of July and 14,400 for the five-month period. Both of the major component industry groupings posted gains for the month with accommodation and food services up 2,800, while arts, entertainment, and recreation posted a slight gain of 100. The additions in accommodation and food services reflected positive results in all of its component industries for the month. Gains in full service restaurants were particularly strong. The rate of annual growth rose to 6 percent, up from 4 percent in June (revised). Annual growth has improved substantially in recent months with a 0.9 percent annual loss as recently as April. Strong growth was present in food services and drinking places with an increase of 12,000 jobs since July 2009. Arts, entertainment, and recreation was up 4,500 jobs. Both industry groups have improved sharply from losses posted last winter. Unlike other industries in the supersector, accommodation employment still showed a substantial 4.4 percent annual loss.

Other Services

A job gain of 2,400 was estimated in other services for July. This increase was the first increase since January and erased a loss of 1,800 posted for June. Most of the growth for the month was in religious, grantmaking, civic, professional, and similar. Over the last year employment was down 4,600 with losses between 1,300 and 1,800 in the three component industries.

Government

Government employment declined 9,100 in July with monthly losses registered in federal, state, and local government. Losses in federal government totaled 1,800 as temporary census workers continued to be laid off. The loss of 2,400 in state government essentially balanced out the gain in June as some seasonal layoffs in state education were shifted into July this year. Local government accounted for more than half the monthly supersector loss, down 4,900 as local government education employment declined precipitously. Over the past year government employment dropped 4,300. Federal government showed an increase of 2,000 because of the remaining temporary census workers. State government employment fell 1,300. Local government showed a loss of 5,000 as local government education fell 7,300.

* Over-the-year data are not seasonally adjusted because of small changes in seasonal adjustment factors from year to year. Also, there is no seasonality in over-the-year changes.

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