Another Rough Month for Financial Services Jobs

For professionals on Wall Street, the June jobs number confirmed what many already knew: The financial services segment of the U.S. economy lost jobs last month. Some observers say the pace of jobs lost on Wall Street could exceed all other previous downturns faced by banks and brokerages since World War II.   

The U.S. Labor Department said early on Thursday that payroll employment fell by 62,000 and the jobless rate was unchanged at 5.5%. Within financial services, 10,000 jobs were lost. 

“The report was weaker than we expected because it shows no improvement from recent trends,” said economists at Barclays Capital in a research note. “However, it also does not indicate further deterioration; the labor market remains consistent with below-trend but positive economic growth that is generating moderate job losses and an upward trend in the unemployment rate.”

The data suggest the Federal Reserve will not raise borrowing costs in August, they believe.

“Right now it is a difficult time in the economy, particularly in terms of jobs,” says John Challenger, head of employment consulting firm Challenger Gray & Christmas. “Every single month in 2008 lost jobs. I do think this is going to continue. So far, there just no end in sight.”

Challenger says the current pace of layoffs within the financial services sector could be at its worst in Wall Street’s post-World War Two history. “I think it is the worst it has ever been. I do think [the jobs] will come back,” he said, noting that this is little solace for many professionals who have already lost their jobs. “We don’t know how long [the improvement in the jobs picture] is going to take.”