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A ten-year streak ends: Health care lost jobs (for now)

December 5, 2013  

Update, Dec. 6: The BLS revised their revision, concluding that September was a net gain for health care after all.

Dan Diamond, Managing Editor

For just over 10 years—121 straight months—there was one constant in the monthly jobs report: Health care jobs would go up.

 Not anymore.

Health care lost 2,500 jobs in September, the Bureau of Labor Statistics concluded in estimates released last month. And if that number stands, it would be the first net loss for the sector since July 2003.

The news mostly snuck past keen observers of the health care sector, largely because the government’s initial estimates—delayed by the government shutdown and eventually released on October 22—stated that the health industry had added 6,800 jobs in September.

But the revised report, which was posted on November 8, downgraded the health sector’s slight September gains to its first negative in more than ten years.

Canary in the coal mine?

September’s number is so striking because it’s such an outlier. But is it an aberration, or a sign of things to come?

“The [September] number should be taken with a grain of salt,” Harvard professor Amitabh Chandra pointed out when I reached him last month.

“It may be revised”—as soon as the jobs report is released on Friday morning, in fact—and “it’s a very small negative.”

The health sector added 28,000 jobs per month in 2012. This year? About half of that.

Chandra also makes a similar observation as Brookings economist Justin Wolfers: Keep an eye on the trends, and look for potential reversion to the mean.

Wolfers specifically recommends looking at three-month patterns before making conclusions about a trend in the market. And the September loss did follow an enormous gain in August (+41,000 jobs in health care).

But July was also a down month, with just 4,500 new jobs—until September, that was the worst showing for the health sector in 10 years.

As a result, the July-August-September-October average is 14,500 new jobs created every month. That’s perfectly in line with health care’s monthly average in 2013, a robust number that outshines many other sectors of the economy.

But it’s also well off from historical averages.

  • Since 2004, health care has averaged about 23,000 new jobs per month, or 275,000 new jobs per year; this year, the sector’s on pace for 100,000 fewer jobs.
  • Moreover, the sector boomed last year, with more than 28,000 new jobs per month. That's about twice the rate of 2013.

Beyond the quantitative evidence, there are anecdotal signs of a slowdown, too, with some nurses finding that hospitals aren't hiring like the old days.

So what to make of this? Chandra and Wolfers were—rightly—cautious about overweighting a single month.

But it’s increasingly clear that, after years of unbridled growth, something has changed in the health sector.

Posted in: Labor Expense, Workforce, Staffing

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