Nonfarm employment continued its road to recovery in 2013
In 2013, U.S. nonfarm employment trended up, continuing the lengthiest employment recovery in the Current Employment Statistics (CES) survey’s history. This article uses CES data to discuss how private and public industry employment, hours, and earnings changed over the year and compares these changes with those of the prior 2 years. Not surprisingly, the greatest number of jobs added in 2013 were in private service-providing industry sectors. Some goods-producing industries—while not the largest contributors to total nonfarm employment—accelerated job growth markedly over the year. Meanwhile, many other industry sectors continued to slowly but steadily add jobs or began to recover those which had been lost in previous years. Positive industry employment trends generally reflected similar movements in related economic indicators over the year.
Nonfarm payroll employment in the United States continued to recover in 2013, according to data from the Current Employment Statistics (CES) survey.1 The economy added a total of 2.3 million nonfarm jobs, averaging 194,000 per month, similar to increases in each of the prior 2 years (see figure 1). Most major industry sectors saw employment gains over the year, with many of the largest 2012 contributors to nonfarm job growth having similar increases in 2013.
Employment recovery continues in 2013
The 2008–2010 employment downturn, with 8.7 million jobs lost, was by far the most severe in magnitude since the inception of the CES survey (also referred to as the establishment survey) in 1939. In relative terms, employment fell by 6.3 percent, a decline second only to the downturn during World War II (see figure 2). From November 1943 to September 1945, payroll employment fell by 10.1 percent, representing 4.3 million jobs lost; the subsequent recovery took 12 months. In contrast, the current employment recovery has been the longest in the history of the CES survey—46 months and counting at the close of the 2013. To put this time span into perspective, the second longest employment recovery lasted 21 months after the employment downturn that ended in May 1991.
Economic indicators, hours, and earnings
CES data serve as principal federal economic indicators. Gains in employment, hours, and earnings indicated steady economic growth in 2013.
Total nonfarm employment and aggregate hours (the product of employment and average weekly hours) tend to coincide closely with business cycle peaks. Temporary help employment and manufacturing average weekly hours often lead business cycle turning points.
Temporary help services employment grew by 8.9 percent over the year, compared with 6.3 percent and 6.7 percent in 2012 and 2011, respectively. Economic theory suggests that business establishments wary of future economic conditions are more likely to purchase labor through temporary help firms to meet short-term fluctuations in demand than hire permanent employees, and that they hire permanent employees only after they are more confident that demand for their products or services has increased (see figure 3).
The average workweek of all employees, at 34.3 hours in December 2013, edged down by 0.1 hour over the year. Combining employment growth and relatively flat average weekly hours, the index of aggregate weekly hours continued to trend up over the year (+1.8 percent). The workweek for manufacturing production employees, a leading indicator, increased by 0.2 hour to 41.9 hours in 2013, while the manufacturing workweek for all employees edged up 0.1 hour to 40.9 hours. Manufacturing overtime hours edged up 0.2 hour over the year.
Average hourly earnings of all employees increased 1.9 percent over the year. Aggregate weekly earnings (the product of employment, average weekly hours, and average hourly earnings) rose 4.0 percent in 2013.
Aggregate earnings are an input into personal income, a component of Gross Domestic Product. Gross Domestic Product increased in real terms over the same 12-month span.2
1 The Current Employment Statistics (CES) program, which provides detailed industry data on employment, hours, and earnings of workers on nonfarm payrolls, is a monthly survey of about 144,000 businesses and government agencies, representing approximately 554,000 individual worksites. For more information on the program’s concepts and methodology, see “Technical notes to establishment survey data,” http://www.bls.gov/web/empsit/cestn.htm. To access CES data, see “Current Employment Statistics—CES (national),” http://www.bls.gov/ces. The CES data used in this article are seasonally adjusted unless otherwise noted.
2 Bureau of Economic Analysis, “Gross domestic product & income,” table 1.1.1, http://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1#reqid=9&step=1&isuri=1.