November 29, 2001 (The Editor’s Desk is updated each business day.)

Services in recession

The services industry division is often alleged to be "recession-proof." Like many other strong generalizations about large groups, this statement is not universally true.

[Chart data—TXT]

The services division as a whole does not lose jobs in periods of recession as designated by the non-partisan National Bureau of Economic Research. The division's rate of job growth, however, does drop significantly.

Important segments of the services division do, in fact, decline in employment during recession. Perhaps most notable among these are engineering and management services, personal services, and miscellaneous repair services. Only the health care industry bucks the trend by adding significantly more jobs in times of economic decline than it does during expansions.

The industry employment data referred to here are products of the Current Employment Statistics program. For more information, see William C. Goodman, "Employment in services industries affected by recessions and expansions," Monthly Labor Review, October 2001. (The National Bureau of Economic Research on November 26 designated March 2001 as the starting point of a recession.)