Entering text into the input field will update the search result below

March Employment: Services Vs. Goods Producing Jobs

Doug Short profile picture
Doug Short


  • The latest monthly employment report showed a gain of 916K nonfarm jobs, which consists of a gain of 733K service-providing jobs and a gain of 183K goods-producing jobs.
  • Even though the unemployment rate increases during recessions, the employed service-providing population increases, and goods-producing jobs disappear.
  • Currently, the number of employees in service-providing industries has plummeted as a result of the COVID-19 pandemic.

By Jill Mislinski

The Department of Labor has monthly data on employment by industry categories reaching back to 1939. At the highest level, all jobs are categorized in either Service-Providing Industries or Goods Producing Industries. The adjacent chart illustrates the ratio of the two since 1939.

The latest monthly employment report showed a gain of 916K nonfarm jobs, which consists of a gain of 733K service-providing jobs and a gain of 183K goods-producing jobs.

In 1939, service providing industries employed more people than goods-producing, 63.1% to 37.2%, a ratio of 1.7-to-1. World War II triggered a surge in goods-producing employment and an accompanying reduction in services. But following the war, we've seen a steady tilt toward services. The ratio is now 6.1 services jobs for every goods-producing job. The key drivers of this secular trend have been the growth of automation that reduces the need for human labor and the globalization of goods production.

The next chart provides a more detailed view of these two employment cohorts. We've adjusted for the 382% growth in the employed population since 1939. A conspicuous feature of this snapshot is the sharp trend reversal in the early 1940s reflecting the impact of World War II on the demand for goods. Another notable detail is the stable ratio since the last recession. We saw shorter periods of a sustained ratio during the stagflation of the 1970s and for about three years starting at the end of 2003. The current ratio of services to goods-producing has been essentially unchanged for the last decade. It is currently at 6.1 - which means there are 6.1 times as many service-providing jobs as there are goods providing jobs.

Another notable insight is the consistent impact of recessions on the relative growth of the two cohorts: Even though the unemployment rate

This article was written by

Doug Short profile picture
Advisor Perspectives is a leading interactive publisher for Registered Investment Advisors. Our AP Charts & Analysis portion of our website analyzes economic and market trends.

Recommended For You

Comments (1)

Interesting overview Doug - thank you!

Are things different now or do the service jobs come roaring back 110% as we subdue Covid? In other words, are we entering a new paradigm? To some degree I think so. Office jobs will not return in full. We live in interesting times.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.