The U.S. labor market continues to see steady, though slower, growth, even as sentiment around job availability has softened, as noted in our accompanying piece. However, hiring activity has become increasingly concentrated in a handful of sectors.
As shown in the chart, hiring in a handful of sectors including state and local government, leisure and hospitality, construction, private education, and health services account for a disproportionate share of recent job gains. These sectors are benefiting from structural tailwinds — demographic shifts, infrastructure investment, and post-pandemic normalization of demand for services. They also highlight the comparative narrowness of recent job creation.
This concentration raises important questions about the breadth of labor market strength. Sectors such as manufacturing, construction, technology, and finance have seen more muted hiring or net job losses of late. Against that backdrop, it’s not surprising that the perception among those seeking work in those fields is that jobs have become harder to find. In certain industries, that’s certainly the case.
For investors and policymakers alike, the key takeaway is that while the labor market remains fairly tight, it’s being heavily supported by a few notable pockets of strength. Understanding where job creation is occurring — and where it’s not — provides additional context for the current state of the economy, labor market dynamics, and the practical implications for workers and potential workers seeking their next opportunity.
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