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Tuesday, October 22, 2013

Some Key Job Sectors Turn Softer

Last year, restaurants and health care accounted for about a third of all the country’s job growth.

So some economists were concerned to see, deeper in Tuesday’s jobs report, a softening in those sectors. Health care posted a gain of only 6,800 jobs, compared with a monthly average this year of 22,000. And restaurants actually lost jobs, 7,100 of them, when they had been adding 25,000 a month.

“These were important sources of job creation, and if they’re fading we might be seeing a slower pace of growth” in the immediate future, said Dean Baker, the co-director of the Center for Economic and Policy Research in Washington.

Diane Swonk of Mesirow Financial said the health care sector had been slowing for some time, in keeping with a flattening of health care spending. Less spending on medical care may be good for the economy, but not so good for the fragile job market.

On the other hand, slowdowns in leisure and hospitality, a sector that includes restaurants and amusement parks, and in specialty construction, which includes home remodeling, point to a pullback in discretionary spending, as did a disappointing back-to-school shopping season.

“A month ahead of the shutdown, it’s particularly worrisome, because we knew that tourism would be hit hard when the government closed,” Ms. Swonk said of the September findings, adding that lower gasoline prices should have prompted more leisure and hospitality spending.

Of course, both economists cautioned against reading too much into just one month of data, noting that the trend could reverse in next month’s report.



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