Health care sector stumbles, retail soars, in latest jobs report

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While the economy added an average of 182,000 jobs per month last year, Friday’s jobs report underwhelmed. In the month of December we only gained 74,000 jobs, the lowest gain since the beginning of 2011. The unemployment rate also dropped to 6.7 percent, but this was largely due to some 347,000 people dropping out of the labor force altogether. In fact, the share of adults with jobs hasn’t actually budged since the end of 2006. You can find a more detailed overview from Neil Irwin, including some conjecture on the implications for the Federal Reserve’s ‘tapering’ of bond-buying.

Yet in a later post Irwin highlights exactly where the December numbers disappointed; namely in an any industry not-named Wholesale or Retail Trade. As his wrote, “[e]very other sector underperformed its recent job creation trend in December, though some did more to drag down overall job creation than others.” One of those was the construction sector, which posted a net-loss of 16,000 jobs — the first reduction since September. Still, the one sector that lost jobs that was particularly surprising for many: health care.

As one of the standouts during the recession, the health care sector has been adding jobs at an incredibly steady pace. Since January of 2007 the industry has added a little more than 2.2 million jobs. While the job loss was comparatively small for last month (-6,000), Dan Diamond notes that it’s the first monthly reduction since July of 2003:

DBHCjobs110800px

December’s loss for health care stand in contrast to the retail trade industry, which posted net gains of 55,000: mostly in food and beverage, clothing and accessories, and general merchandise stores. Moreover, according to the Institute for Women’s Policy Research, this job growth went entirely to women in these sectors.

Over and above the particulars for health care and retail trade from last month, the contrast isn’t as stark. For all the discussion of health care’s remarkable job growth, including an average monthly gain of 17,000 jobs in 2013, the retail sector scored an average of 32,000 in that same time period. Moreover, since 2010 retail employment has largely grown at the same upward pace:

FRED Employment Health Care-Retail

This isn’t really meant as an extensive exercise, but a comparative opportunity to emphasize lower-wage employment growth. The reason folks pay attention to job gains in the health care sector is because the federal government has long-term budgetary issues that directly relates to paying for those services. On the other hand much fewer people seem to pay attention to the comparatively larger gains in retail — almost all of which pay mean annual wages of less than $27,000. Which is to say, outside of some very sharp and motivated work in blogs and some mainstream outlets, the explosion of low-wage job growth and whatever implications that might entail appear absent from national policymakers. At best it’s only implied in Washington’s recent rhetorical interest in noticing working poverty while continuing to argue over how much to cut the safety-net.

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