The pace of U.S. jobs growth slowed to +1.1% year over year in November, 2007 from +1.2% in the previous month. Employment growth has been edging down for more than a year-and-a-half, ever since the peak level of +2.1% was achieved in March 2006.

Two Sectors are in Negative Territory
Two sectors are in negative territory. Employment in construction was -1.6% year over year in November. This figure may actually be better than expected given the 25.0% decline in housing starts so far this year. The number of manufacturing jobs is -1.3% year over year, which is a slight improvement versus October (-1.4%) and September (-1.5%). The significant drop in value of the U.S. dollar versus many other major currencies should cause a gradual improvement in manufacturing employment over the coming year.

Two Sectors Between 0.0% and +1.1%
Financial services employment has weakened considerably over the past year-and-a-half. The number of jobs in this sector is now almost exactly even with a year ago, whereas it had been +3.0% in April, 2006. This sector has been hit by a double whammy. First, financial firms have grown more cautious due to the problems created by the subprime mortgage fiasco. Second, the real estate component of this sector has suffered from the spillover consequences of tighter credit on the housing market.

Retail trade employment (+0.4%) has been lackluster for over a year. Consumer spending remains relatively buoyant, but the days of big gains (e.g., as a result of tax cuts) are in the past in this cycle. Also, the Internet is cutting into traditional retail sales. Furthermore, much of retail activity ties in to weak housing markets, through sales of appliances, furniture and home renovation products.

Three Sectors Close to the National Average
Three sectors are close to the national average (+1.1%). Growth in transportation and warehousing employment has slowed (+1.0% in November) over the past year. This sector was consistently accounting for job gains of +2.0% to +3.0% in 2004 through 2006.

Information services provided a +0.9% increase in employment in the latest month and government created +1.1% new jobs. Government job creation has hovered between +0.5% and +1.5% for the past three years.

Three Sectors Well Above the National Average
Professional and business services employment at +1.8% remains above the national average, although it is down from a much stronger +4.0% level in early 2006. The two top performers, in terms of year-over-year employment growth, continue to be education and health (+3.1%) and leisure and hospitality (+2.8%). The former is a stable work environment based on demographics, with a particular expansion of needs coming from an aging population. The latter is an outgrowth of strong business travel as a result of the stage of the business cycle and increased tourist travel, given an extra impetus from foreign travelers due to the drop in value of the dollar.

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