Bull Bear Report Jul 08 2011

Finance Sector Loses Jobs in June

By julie steinberg

The finance sector saw 15,000 jobs disappear last month, according to the June Employment Situation Report from the Bureau of Labor Statistics. The sector had been gaining jobs since February.

The unemployment rate for the industry increased to 6.9% in June from 6.8% in May. The sluggish numbers reflect the disappointing results across all industries: The economy added only 18,000 jobs last month, far fewer than the 100,000 many economists had been expecting.

For the finance sector alone, economists hadn't been expecting growth this month.

"The drop isn't that surprising," said Stuart Hoffman, chief economist at PNC Financial Services Group. "Financial services jobs have been basically flat for the past six months. There was growth in May but it reverted in June. The outlook for the future is flat."

Some of the reasons for the lack of growth include instability in the industry. Firms are coping with regulation, weak loan demand and lack of activity in the real estate industry, Hoffman said.

Finance and insurance lost 8,700 jobs, while real estate, rental and leasing lost 6,200 jobs. Credit intermediation and related activities lost 5,400. The one bright spot in the sector was securities commodity contracts and investments, which added 2,300.

Economists last month had predicted that the economy would slow down before an acceleration in the fall.

Some people are deciding not to look for work now. Recent graduates won't enter the workforce until September, said Doug Arms, senior vice president at global staffing firm Accounting Principals, a subsidiary of Adecco, headquartered in New York.

Still, Arms said he's seeing "pretty good demand" for operational accounting, especially on the tax side. Like Hoffman, he doesn't expect an upswing in job creation in July and August.

The financial activities sector spans finance and insurance, commercial banking, security, commodities, insurance funds and real estate.

The overall unemployment rate rose to 9.2% in June from 9.1% in May.

Write to Julie Steinberg



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