Banks Skip Jobs Party
NEW YORK (
) -- Wall Street was among the few industries that missed out on the strongest private payroll recovery in nearly a year.
The Bureau of Labor Statistics said Friday the economy added 243,000 jobs, more than double consensus expectations of economists. Companies added 257,000 jobs, with job creation being pretty widespread.
A sector breakdown showed strong contributions from the manufacturing and services sector. However, the "Financial Activities" segment, which includes the central bank, commercial banks and securities industry, insurance, funds and real estate rental and leasing, lost about 5,000 jobs in January.
Commercial banks shed 2,000 jobs, while the securities industry shed 2,900 jobs.
While the private sector has created jobs now for 23 straight months, the financial sector has had a more spotty record. Most of the pain has been felt in the securities and investment banking businesses, which has shed a total of 11,800 jobs now over five straight months.
That is not surprising as the weakness in capital markets activity has persisted since the second quarter of 2011. Banks have announced 31,767 job cuts since September according to outplacement firm Challenger Gray and Christmas.
Bank of America
(BAC) - Get Report
said last year it will shed more than 30,000 jobs as it seeks to aggressively cut expenses.
Citigroup
(C) - Get Report
is "right-sizing" its businesses by reducing its headcount by about 5,000 jobs, atleast a quarter of which is expected in investment banking.
Morgan Stanley
(MS) - Get Report
said it would lay off 1,600 employees by the first quarter of 2012.
Wall Street announced 7611 job cuts in January alone. Small wall street firms are also shutting shop, including
Ticonderoga Securities
and
Kaufman Brothers
, adding to the layoff pool.
Still, shares of bank stocks were rising Friday as the strength in private sector job growth showed continuing momentum in the economy. Shares of Bank of America were up nearly 4%. Citigroup saw shares rise 2.5%, while shares of
JPMorgan Chase
(JPM) - Get Report
and
Wells Fargo
(WFC) - Get Report
gained about 2% each.
--Written by Shanthi Bharatwaj in New York
>To contact the writer of this article, click here:
Shanthi Bharatwaj
.
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