Hire Wire Oct 07 2011

Finance Sector Loses Jobs in September

By julie steinberg

The finance sector lost 8,000 jobs lost month, according to the Bureau of Labor Statistics, and economists expect that downward trajectory to continue. The industry slid after gaining 3,000 jobs in August.

Finance and insurance lost 8,800 jobs, while securities, commodity contracts and investments lost 3,400. Credit intermediation, which signifies commercial banks, lost 2,700 jobs.

In light of the gloomy economic environment of the past month, these numbers aren't surprising, said Nigel Gault, chief U.S. economist with IHS Global Insight, an Englewood, Colorado-based financial and economic forecasting firm.

"Given recent events, like pressures on the banks, the down stock market, and reduced M&A activity, we expected to see cutbacks in the financial sector," he said. "The financial world reacts pretty quickly when profits are being squeezed."

Gault believes the trend will continue for the next several months and that current losses are a "marker for future cuts in the financial sector."

Bank of America is the most recent bank to announce widespread layoffs, with plans to shed 30,000 jobs over the next few years.

The larger economy added 103,000 jobs in September, and August's and July's numbers were revised upward by a total 99,000 jobs. Of the jobs added in September, 45,000 were telecommunications workers who had been on strike in August. The unemployment rate stayed the same at 9.1%.

"It's not a really strong report, but people have been worrying that the economy had been tipping into recession," Gault said. "That might still happen, but this report doesn't show that – it shows the economy growing slowly, creating jobs. Not a lot of jobs, but still better than people had anticipated."

Write to Julie Steinberg at Julie.Steinberg@dowjones.com




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