November 30, 2001 (The Editor’s Desk is updated each business day.)

Some service industries grow faster in recessions

Most of the service division's 16 major industry groups decelerate in job growth or lose jobs during recessions. Five major groups are at least slightly countercyclical, however, gaining jobs faster in recessions than in normal times.

[Chart data—TXT]

The percentage point difference between growth rates in recessions and expansions among the countercyclical group ranges from a high of 0.5 in private education to 0.1 in amusement and recreation. The major industry group with the greatest employment in the division, health services at 0.3 percentage point, is among this group.

Demand for health care is relatively unaffected by recessions, because to the consumer, healthcare can be a necessity rather than an optional commodity whose purchase can be postponed. Furthermore, Medicare, Medicaid, and private insurance provide funding dedicated solely to healthcare, so that much of the funding is not subject to competition with other types of purchases, and benefits remain available to persons during periods of unemployment.

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.)