Employment growth slowed in December according to the BLS data released this morning. Nonfarm payrolls were up by only 199,000 employees, compared to 249,000 in November. By contrast, employment grew by 648,000 in October, 379,000 in September and 483,000 in August.
Both tangible and intangible producing industries grew by lower amount in December but the slowdown was more pronounced in intangible producing industries. Employment in intangible-producing industries grew by just 58,100 – a marked decline from November’s disappointing increase of 97,400. This compares to increases of 187,500 in October, 132,800 in September and 310,800 in August. Employment in tangible-producing industries was up by 140,800 in December, close to the 155,900 increase in November.
The biggest slowdown was in intangible Professional and Business Services, which grew by only 34,400 in December compared to 61,500 in November and 112,800 in October. Arts, Entertainment, and Recreation also saw a sharp decline in employment growth, rising by only 7,000 compared to growth of 10,200 in November. The sector had been growing at an average rate of 54,000 in the 3rd quarter of 2021 and a much higher rate than that earlier in the year.
The bright spot in the tangible producing industries was in Accommodation and Food Services, which grew by 52,600 in December compared to only 31,000 in November. Employment in this industry is very volatile however. For example, it grew by 352,400 in July but only 7,500 in August.
As I have noted in earlier postings, the labor market seems to have settled back into the post-Great Recession, pre-pandemic pattern of relatively equal growth in tangible-producing versus intangible-producing industries – but at a slower rate. The COVID-19 pandemic has done little to disrupt to dramatic shift in the tangible-intangible structural balance that emerged after the Great Recession.
For more on the categories, see my explanation of the methodology in an earlier posting https://intangibleeconomy.wordpress.com/2020/06/11/which-jobs-got-hit-in-the-covid-crash-tangible-versus-intangible/