Where the Private Sector’s Gains Are

Government: bad. Private sector: good.

That’s been the jobs story of the recovery for years now: America’s businesses have gotten back to hiring, despite uncertainty and cutbacks in Washington, adding 212,000 jobs in October and about 7.6 million over the past four years. Government employment, on the other hand, has drifted down over the past four years, with local, state and federal agencies shedding about 8,000 positions last month.

But where is the private sector adding jobs?

Despite the housing turnaround, employment has improved only modestly in that sector. Construction employment rose to 5.8 million in October from 5.6 million a year earlier. But before the recession hit, employment in that sector had climbed as high as 7.7 million.

The jobs report “looked strong for the economy over all but weak for housing,” said Jed Kolko, the chief economist at Trulia. “Residential construction employment grew slowly and remains far below the pre-bubble level.” In addition, he said, “employment among young adults dropped,” an important indicator to watch for housing, as young people often drive new household formation.

“The gains in residential construction are consistent with the recovery we have seen unfolding in the housing sector,” said Jason L. Furman, the chairman of President Obama’s Council of Economic Advisers. “But additional steps still must be taken to create a more durable and fair system that promotes responsible homeownership.”

Rather, service industries have driven job growth in the recovery, adding 2.1 million jobs over the past year â€" 177,000 last month alone. In particular, the leisure and hospitality sector (establishments like restaurants, bars and hotels) has added workers at a strong clip, including 53,000 positions last month. The downside is that many of those jobs are part time and low pay. Average hourly earnings for employees in that sector are just $13.50.