Industrial Analysis

by Jerry Brown
December 2011

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

Overview

Employment fell for the third consecutive month in November with estimates indicating a loss of 13,700 for the month. Nearly every supersector showed losses in November with the only gain being an addition of 1,300 in educational and health services. Major losses occurred also in leisure and hospitality, down 4,400, and government, down 4,000. There were three other supersectors with losses in excess of 1,000 including construction, -1,600, manufacturing, -1,200, and professional and business services, -1,100. Compared to November 2010 employment was up 9,200, equal to 0.3 percent. The rate of annual growth has dropped substantially after reaching 1.7 percent last August. Private employment showed an annual gain of 1.0 percent. The real weakness is in government, where employment was off 12,800 over the past 12 months. The only other large loss was a decline of 1,500 in information. The largest annual increase was in educational and health services, up 9,000, but the 1.9 percent annual gain in this supersector was below the national rate of growth. There were only two supersectors that had a higher rate of growth than the U.S. as a whole, financial activities and construction.

Mining and Logging

There was no change in mining and logging employment over the past month. Over the past year employment was up 200 for the supersector.

Construction

Construction employment was off 1,600 in November as colder weather finally took hold. This counterbalanced a gain of 1,500 posted in October, when unusually warm and dry weather contributed to a delay in seasonal layoffs. This weaker performance carried through all of the component industries. Over the past year the supersector showed a gain of 400, with all of the gain in construction of buildings, up 1,400. Specialty trade contractors and heavy and civil engineering employment were each down 500.

Manufacturing

Employment in manufacturing fell for a third consecutive month, down 1,200. Nearly all the losses during the past three months have been from a decline in nondurable goods manufacturing. The November loss was centered largely in food manufacturing which pushed the seasonally adjusted loss in nondurable goods to 1,300 for the month. Durable goods manufacturing was slightly positive for the month and has increased five of the past six months.  Over the past year the supersector was up 1,800. Durable goods was the locus of all the growth, adding 4,600 with much of the growth coming in machinery and fabricated metal product manufacturing. Nondurable goods manufacturing erased more than half these gains, down 2,800 over the past year. On the negative side, new orders for manufactured durable goods in the U.S. as a whole has decreased the past two months. On the positive side, the Minnesota business conditions index remained solidly above growth neutral for the 26th consecutive month.

Trade, Transportation, and Utilities

Trade, transportation, and utilities lost 700 jobs for the month, marking a third consecutive monthly loss. Most of the monthly weakness was in wholesale trade where nondurable goods employment showed an unadjusted loss in November rather than the expected small gain. A good deal of the weakness the past three months has been in transportation, warehousing, and utilities as seasonal increases at bus companies were softer than expected. Retail trade was up slightly for the month as department stores showed strong monthly results. On an annual basis the supersector added 2,200. Retail trade added 2,800 largely from increases in general merchandise stores which increased 2,100. Wholesale trade added 2,100 as gains in durable and nondurable wholesaling erased losses in wholesale electronic markets. The weak results the past three months in transportation, warehousing, and utilities has led to an annual decline of 2.9 percent, down from an increase of 6.3 percent as recently as August.

Information

Information employment was off by 600 in November from a general weakness among the component industries. This was the fifth monthly loss in the past six months. These weak results are manifest in an annual loss of 1,500. All of the component industries were down substantially, particularly a loss of 1,100 in publishing industries. 

Financial Activities

November saw a second consecutive monthly loss in financial activities with employment dropping 800 after a decline of 1,700 in October (revised). Most of the loss was in finance and insurance which was down 700 as most of the component industries showed somewhat weak results for the month. Real estate and rental and leasing showed a slight loss with poor performance in the real estate component. Financial activities showed a 12-month gain of 0.7 percent and was one of only two supersectors to outperform its U.S. counterpart industry in terms of annual gain. Nearly all of the gain was in insurance carriers which grew by 2,900. Real estate and rental and leasing was the weak link showing a loss of 1,800.

Professional and Business Services 

Employment fell 1,100 in November. The loss was caused by a loss of 2,100 in professional and technical services. This was the first loss in this industry sector since July. Erasing much of this loss was a gain of 1,200 in administrative and support services which also added 3,300 in October (revised). Growth in employment services was the driving component for each of these increases, usually a good sign for growth in other industries as well in future months. Over the past year professional and business services employment increased 1.6 percent with about half of the gain in employment services. Most of the remaining gains came in computer systems design which saw a gain of 1,700.

Educational and Health Services

Employment fell 1,100 in November. The loss was caused by a loss of 2,100 in professional and technical services. This was the first loss in this industry sector since July. Erasing much of this loss was a gain of 1,200 in administrative and support services which also added 3,300 in October (revised). Growth in employment services was the driving component for each of these increases, usually a good sign for growth in other industries as well in future months. Over the past year professional and business services employment increased 1.6 percent with about half of the gain in employment services. Most of the remaining gains came in computer systems design which saw a gain of 1,700.

Leisure and Hospitality

The largest monthly decline in November occurred in leisure and hospitality where employment fell 4,400. Since peaking in July at 247,300 jobs, the supersector has produced losses in each of the past four months resulting in a decline of 11,700 during this time. In November most of the monthly loss came in arts, entertainment, and recreation which fell by 3,600. This rather dramatic decline was partly caused by some seasonal layoffs being pushed to later in the year, but the size of the loss was well beyond the effect of a warmer than usual October. Accommodation and food services had a loss of 800 in November, but has been the major source of weakness over the past four months, down 9,800 for the period. Despite recent losses the supersector showed a gain of 4,000 over the last 12 months. All of the annual increase came in accommodation and food services with 3,600 added in food services and drinking places. Arts, entertainment, and recreation has shown a swift decline in fortune as the rate of year-over-year growth has declined from 3.9 percent in July to -0.3 percent in November.

Other Services

Estimates indicated a loss of 600 jobs in the other services supersector for November. The majority of the loss came from personal and laundry services where the unadjusted monthly change was about 1.5 percentage points worse than usual. Over the past 12 months the supersector showed a loss of only 200, but this masked some fairly large changes in the components. Religious, grantmaking, civic, professional, and similar organizations showed annual growth of 1,700, but this was erased by a loss of 1,700 in personal and laundry services.

Government

Substantial declines in local government accounted for most of the monthly loss of 4,000 in government employment. Local government showed a monthly loss of 3,500 with both educational and non-educational sectors substantially weaker. Combined with a loss of 3,700 in October, local government has erased most of the gain experienced in September which was clearly a case of early seasonal hiring. The employment level is now back down to levels registered in July. The remainder of the loss came in federal government, down 500. With seasonal hiring and layoffs complete, government employment showed a loss of 3.0 percent compared to last November, equal to 12,800 jobs. Every estimated industry showed losses, but declines of 4,600 in both local government education and local government excluding education were the key to the large supersector decline. State government was off by 2,500 jobs, with more than 1,700 jobs eliminated in state government educational services.

Top