Most people do not realize it but the service sector of our economy in the US makes up the greatest portion of the jobs. Manufacturing is now the smallest well under 10% of the employment base. Retail is fairly large, but it’s nothing compared to the service industry. Having the service industry expand does indicate that we are coming off the bottom of the recession and things will be looking up from here on out.
Of course, we still have to worry about the commercial real estate market fallout, which will be significant and another huge hit on the banks, but the authorities, the fed, and the TARP monies are sitting on the sidelines ready to do something serious about it. Obviously, the service sector was hit hard as consumers in the middle class are spending less money going out to eat, and traveling. The hospitality industry has a huge chunk of service related jobs.
According to Industry Week in the first week of October 2009;
The ISM said the overall economic outlook remains clouded: “Even with the overall month-over-month growth reflected in the report this month, respondents’ comments vary by industry and remain mixed about business conditions and the overall economy. Services makes up the lion’s share of economic activity and employment, and is therefore critical to recovery from the long recession.”
The US economy cannot recover from the recession until the service industry recovers and starts replenishing those jobs that have been lost. As more and more companies see more and more customers, their profits will increase. They will have to hire back those workers they laid off. With more workers making a paycheck again, that means retail sales will go up, and therefore, manufacturing jobs will also increase because those retailers will need more inventory to replenish what they’ve sold.
This is a very good sign for economic recovery, almost as good as the stock market, which generally leads economy by 6 to 10 months, and it has been going up now for over six months. Please consider all this.