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Some 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 more meaning 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. Analysts expect a slight increase of unemployment in December, compared to November, to be reported by the Department of Labor. The figure for December is predicted to be 10.1 percent up from 10 percent and the overall job loss is expected to be approximately 8000 jobs. An ISM report shadowed a trend of a slower drop in it’s employment gauge, from 41.6 to 44, in the same period of time. The employment gauge of ISM hasn’t risen for two years, but the decline is slowing. All of the numbers seem to be headed in a positive direction, but ever so slowly.

Remote expansion lends concern to optimism

The economic sectors reporting actual growth were finance, retail, insurance, and public administration. This marked the first time the overall sector has grown in 13 months. Gains in retail were mostly due to seasonal employment during the holidays. This holiday-hiring factor, combined with how small and isolated the gains actually were, adds to the cautious optimism of economic-trend analysts. None of the indicators was significant enough to spark strong positive reaction by any industry analyst. 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, an influential site 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. The growth was slower in November, but new orders are expected to drive up prices and revenue. 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. The impact isn’t dramatic, but the signs are positive. Outsourcing put most jobs in this sector elsewhere. Manufacturing’s recovery has more of an emotional appeal than much real help in rebuilding the economy.