More of the same

Small positive signs of a slow recovery continued last quarter as the service sector of the economy grew slightly, primarily due to holiday sales. The increase was so slight that it created very few new jobs. The growth consisted mostly of recalling laid-off employees or replacing positions previously discharged. The Institute for Supply Management (ISM), a private trade group, reported that agriculture and retail led the way for the modest increase. ISM follows 18 industries, and reported seven had signs of growth. The overall service index for the quarter was 50.1, with an index of 50 or higher indicating growth. The growth was small, but considered an important marker for continued slow recovery.

Less loss but not more jobs

The trend continued across most sectors of the economy with a slowing in the loss of jobs, but no measurable creation of new jobs. Most analysts expect the Department of Labor to report a slight increase in unemployment in December as compared to November. The figure for December is predicted to be 10.1 percent, up from 10 percent, and the job losses overall is predicted to be around 8000 jobs. An ISM report shadowed a trend of a slower drop in it’s employment gauge, from 41.6 to 44, for the same time period. ISM’s employment gauge hasn’t risen in two years, but the fall is slowing. All of the numbers seem to be headed in a positive direction, but ever so slowly.

Isolated growth lends caution to optimism

The economic sectors reporting actual growth were finance, retail, insurance, and public administration. This was the first growth in the sector for 13 months. Gains in retail were mostly due to seasonal employment during the holidays. Holiday hires figuring in, as well as how isolated and diminutive the gains were, makes for cautious optimism among analysts. No indicator was significant enough to elicit a marked positive reaction by industry analysts. This sector’s increase has an impact because the service sector comprises 80 percent of non-agriculture employment in the US.

Financial service sector shows signs of life

Postings for jobs in the financial service sector grew 19 percent in December as compared to the previous year, according to EFinancialCareers.com, a site of some influence catering to finance and accounting professionals. Fields related to debt, accounting, and fixed income held the concentration of growth. New orders in these areas rose for the fourth straight month. November growth was slower, but prices and revenues are expected to be driven up by new orders. These increases are expected to create more jobs in the near future.

Manufacturing limps toward recovery

ISM reported that the manufacturing sector grew again in December for the fifth consecutive month. This is a positive sign for the economy, but does not carry the impact it once did. Outsourcing put most jobs in this sector elsewhere. The recovery of manufacturing has more emotional appeal than actual help in recovery.