Financial sector job losses easing off, Moody's says

Job security in the financial sector is still a precarious proposition, but the worst may be over, said Marisa DiNatale, a senior economist at Moody’s Economy.com, a division of Moody’s Analytics Inc. of West Chester, Pa. “It’s too early to tell,” she said. “I’m not convinced it’s hit the bottom yet. But we are likely nearing the bottom.” Last month, 43,000 jobs were lost in the financial services sector, which includes such categories as securities, commodity contracts and investments, real estate and credit card intermediation. That’s an improvement over the 44,000 jobs lost in February and the 56,000 jobs lost in January, according to the Bureau of Labor Statistics. “The number of job losses is going to get smaller going forward,” Ms. DiNatale said. The future impact of the government intervention in the industry and consolidation of financial services companies is unknown. While government seems to be committed to ensuring that no large banks fail, it is probable that many smaller, regional banks may go out of business, Ms. DiNatale said. “There is a lot of uncertainty in the banking sector as to what government is going to do to prop up the banks,” she said. Through last month, the financial services industry had lost 495,000 jobs from its peak of 8.4 million jobs at the end of 2006. Moody’s projects total job losses of 686,000 from peak to trough, but that the industry will add jobs in the first quarter of 2010. “Expect to see a positive,” Ms. DiNatale said. “But it will be small, and when it does come, it will be slow. Given the restructuring on Wall Street, a lot of these jobs will never come back. I think the recovery will be slower for financial activities.”