34  Monthly Labor Review • April 2011

The 2007–09 Recession: Professional & Business

Professional and business services: 

employment trends in the 2007–09 

recession

Frank Conlon

Frank Conlon is an 

economist in the 

Office of Employment

and Unemployment

Statistics, Bureau of 

Labor Statistics. Email: 

conlon.frank@bls.gov.

Employment in professional and business services fell with the recent

slump in the broader economy; the temporary help services industry, 

which regularly leads fluctuations in aggregate employment, accounted

for a large portion of the cumulative job losses 

During the most recent recession,1

from December 2007 to June 2009, 

employment in the professional and 

business services industry2 declined by more 

than 1.6 million, a figure that was second only 

to the approximately 2.0 million jobs lost in 

manufacturing. Compared with job losses in 

the previous 11 recessions, the 2007–09 contraction in professional and business services 

employment was the largest, in both percentage and absolute number, since the series 

began in 1939. (See chart 1.) This dramatic 

decrease in employment followed 5 years of 

steady growth: from 2003 to 2007, the industry had averaged an employment gain of 

roughly 3 percent per year, double the average 

annual growth rate of private sector employment as a whole. 

Many of the same industries that flourished prior to the 2007–09 recession were 

the main contributors to the job losses experienced by professional and business services 

during the recession. This article analyzes 

recessionary employment trends among professional and business services industries, as 

well as the contemporaneous movements of 

related indicators.

Temporary help services

During the course of the 2007–09 recession, 

administrative and waste services accounted 

for more than 3 out of every 4 jobs lost in 

professional and business services. Administrative and waste services’ payrolls shrank by 

more than 1 million positions, a drop that, 

as a percentage, was roughly 3 times larger 

than the sector’s losses in the 2001 recession and about 5 times larger than in the 

1990–91 recession.

Temporary help services (NAICS 56132) 

accounted for the lion’s share of the jobs 

lost in administrative and waste services, 

with employment in the industry falling 

by 800,000, or 31 percent, to levels not 

seen since 1996. In comparison, during the 

1990–91 and 2001 recessions, temporary 

help services employment fell by 4 percent 

and 13 percent, respectively. (See chart 2.) 

Employment trends in temporary help 

services garner special attention, because 

the industry is considered by many to be 

a leading indicator of change in aggregate 

employment. During the 16 months leading 

up to the 2007–09 recession, temporary help 

services lost 93,000 jobs. From its peak in 

August 2006 to its trough in August 2009, 

temporary help services employment fell 

by 912,000. Then, between bottoming out 

and the end of 2010, the industry recovered 

462,000 jobs, or about half of the positions 

cut from peak to trough.

Since 1990, peaks and troughs in temporary help services employment generally 

have led those of total nonfarm employment. Temporary help services employMonthly Labor Review • April 2011  35

 Chart 1. Percent change in professional and business services employment during recessions, 1945–2009

Dec 2007–Jun 2009

Mar 2001–Nov 2001

Jul 1990–Mar 1991

Jul 1981–Nov 1982

Jan 1980–Jul 1980

Nov 1973–Mar 1975

Dec 1969–Nov 1970

Apr 1960–Feb 1961

Aug 1957–Apr 1958

Jul 1953–May 1954

Nov 1948–Oct 1949

Feb 1945–Oct 1945

Percent

 –10 –8 –6 –4 –2 0 2 4

 Chart 2. Temporary help services indexes of employment, seasonally adjusted

Index 

(first month of

recession = 100)

1990–91 recession

Index

(first month of

recession = 100)

2007–09 recession

2001 recession

NOTE:  The temporary help services (NAICS 56132) employment series starts in 1990; therefore, data prior to the recession that began in July

1990 go back only 6 months.

Number of months from start of recession

125

115

105

95

85

75

65

125

115

105

95

85

75

65

–16 –14 –12 –10 –8 –6 –4 –2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38

 –10 –8 –6 –4 –2 0 2 4

Percent

SOURCE: U.S. Bureau of Labor Statistics.

SOURCE: U.S. Bureau of Labor Statistics.
The 2007–09 Recession: Professional & Business

36  Monthly Labor Review • April 2011

ment reached a local high in March 1990, 3 months before nonfarm employment peaked; both series reached a 

trough in May 1991.3 Payroll employment in temporary 

help services peaked in April 2000, 10 months before total 

nonfarm; bottomed out in April 2003, 4 months before 

total nonfarm; peaked in August 2006, 17 months prior 

to total nonfarm; and again reached a trough in August 

2009, 6 months before total nonfarm. (See chart 3.) 

Between December 2007 and March 2008, temporary 

help services accounted for 48 percent of the employment 

losses in the nonfarm economy. This decline contrasts with 

what occurred during the first 3 months of the 1990–91 

and 2001 recessions, when temporary help services contributed about 5 percent and 32 percent, respectively, of 

aggregate job losses. Over the course of those two recessions, job losses in temporary help services as a share of 

losses in total nonfarm employment narrowed, supporting the widely held notion that as payroll cuts become 

necessary during a downturn, most wary employers opt to 

purge their contract or temporary help employees before 

their permanent employees.4 During the latest recession, 

falling demand for labor was accompanied by a precipitous fall in temporary help employment; concomitantly, 

the job openings rate for professional and business services fell 41 percent from December 2007 to June 2009. 

(See chart 4.)5

Professional jobs and the housing bust

By the end of the 2007–09 recession, professional and 

technical services, the other major sector of professional 

and business services,6 had shed 324,000 positions, or 

4 percent of employment. The industry did not experience job cuts until two quarters after the beginning of the 

recession. Professional and technical services averaged a 

monthly job loss of approximately 6,000 during 2008 and 

an average job loss of about 25,000 in 2009. Three industry groups—legal services (NAICS 5411); accounting and 

bookkeeping services (accounting, tax preparation, bookkeeping, and payroll services, NAICS 5412); and architectural and engineering services (architectural, engineering, 

and related services, NAICS 5413)—accounted for about 

72 percent of the job losses in professional and technical services during the most recent downturn. According 

to the Bureau of Economic Analysis, all three groups are 

dependent on the real estate sector (real estate and rental 

and leasing, NAICS 53), whose output accounts for about 

5 percent of every dollar of final demand in legal services, 

 Chart 3. Total nonfarm employment and temporary help services employment, seasonally adjusted, 1990–2010

Total nonfarm

(thousands)

150,000

140,000

130,000

120,000

110,000

100,000

Temporary help

 services

 (thousands)

NOTE:  Shaded areas represent recessions as determined by the National Bureau of Economic Research (NBER). The most recent 2 months of

data are preliminary.

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

2,800

2,300

1,800

1,300

800

Temporary help services

Total nonfarm

SOURCE: U.S. Bureau of Labor Statistics.
Monthly Labor Review • April 2011  37

3 percent in accounting and bookkeeping services, and 

2 percent in architectural and engineering services.7 The 

continued decline in both sales of existing homes and 

sales of new homes may have contributed to the overall 

employment decline in professional and technical services 

during the recent economic downturn.8

From December 2007 to June 2009, legal services employment fell by 46,000, or about 4 percent; this loss is in 

contrast to an employment gain of nearly 2 percent during the 2001 recession and a drop of 1 percent during the 

1990–91 recession. (See chart 5.) Typically, legal services 

employment proves resilient relative to aggregate employment during recessions, perhaps partly because of the rise 

in demand for bankruptcy litigation: since 1981, bankruptcy filings have increased every year associated with a recession.9

 The latest economic recession was no different: by 

the second quarter of 2009, demand for bankruptcy work 

was up 6 percent from a year earlier, the largest growth 

rate among all practice areas of the legal profession.10 Demand among real estate law practices, by contrast, declined 

considerably during that same period. Coincidentally, title 

abstract and settlement offices, which are highly involved 

in handling legal documents for the transfer, finance, and 

settlement of real estate, lost more than one-fifth of employment by the end of the 2007–09 recession.

Accounting and bookkeeping services also sustained notable payroll cuts during the most recent recession, losing 

54,000 jobs from December 2007 to June 2009. This loss 

represented a 6-percent decline in employment, compared 

with the 2 percent lost during each of the 1990–91 and 

2001 recessions. The greater part of the job losses were concentrated in payroll services, which contracted by 29,000, 

accounting for 1 out of every 2 positions lost in accounting 

and bookkeeping service during the 2007–09 recession.

From December 2007 to June 2009, architectural and 

engineering services employment fell by 132,000, or 9 percent, a percentage that contrasts with losses of 1 percent 

and 4 percent in the 2001 and the 1990–91 recessions, 

respectively. During the most recent economic downturn, 

the construction sector, a sector that is commonly viewed 

as mutually dependent on the architectural and engineering services industry group, made significant payroll cuts.11

Residential construction employment, which had been 

falling since early 2006, continued to plummet as residential construction projects petered out.12 Employment in 

the two industries—construction and architectural and 

engineering services—has experienced similar historical 

trends. (See chart 6.) 

 Chart 4. Indexes of job openings rate for professional and business services employment and temporary help 

services employment, seasonally adjusted, December 2000–December 2010

Index 

(December 2000 = 100)

Index 

(December 2000 = 100)

Temporary help services employment

Job openings rate

140

120

100

80

60

40

20

0

140

120

100

80

60

40

20

0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

 Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec

SOURCE: U.S. Bureau of Labor Statistics.
The 2007–09 Recession: Professional & Business

38  Monthly Labor Review • April 2011

 Chart 5. Legal services indexes of employment, seasonally adjusted

Index 

(first month of

recession = 100)

2001 recession

1990–91 recession

107

105

103

101

99

97

95

93

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Number of months since beginning of recession

Index 

(first month of

recession = 100)

107

105

103

101

99

97

95

93

2007–09 recession

 Chart 6. Construction index of employment and architectural and engineering services index of employment, 

seasonally adjusted

160

150

140

130

120

110

100

90

80

70

NOTE:  Shaded areas represent recessions as determined by the National Bureau of Economic Research (NBER). 

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Index 

(January 1990 = 100)

Index 

(January 1990 = 100)

160

150

140

130

120

110

100

90

80

70

Architectural and engineering services

Construction

SOURCE: U.S. Bureau of Labor Statistics.

SOURCE: U.S. Bureau of Labor Statistics.
Monthly Labor Review • April 2011  39

Notes

 1 Recessions are identified by the National Bureau of Economic 

Research (NBER), according to which the most recent recession began in December 2007 and ended in June 2009. The previous two 

recessions were from July 1990 to March 1991 and from March 

2001 to November 2001, respectively. For a complete list of business cycle dates, see “U.S. Business Cycle Expansions and Contractions” (Cambridge, MA, National Bureau of Economic Research, 

Apr. 4, 2011), http://www.nber.org/cycles/cyclesmain.html (visited Apr. 5, 2011).)

The data on employment used in this article are from the Current Employment Statistics (CES) survey, a monthly survey of about 

140,000 nonfarm business and government agencies representing 

approximately 440,000 individual worksites. For more information 

on the survey’s concepts and methodology, see “Technical Notes to 

Establishment Survey Data Published in Employment and Earnings” 

(U.S. Bureau of Labor Statistics, Feb. 4, 2011), http://www.bls.

gov/web/cestn2.htm (visited Apr. 21, 2011). To access CES data, see 

“Current Employment Statistics - CES (National)” (U.S. Bureau of 

Labor Statistics, no date), http://www.bls.gov/ces (visited Jan. 10, 

2011). The CES data used in this article are seasonally adjusted unless 

otherwise noted.

 2 The professional and business services industry encompasses 

North American Industry Classification System (NAICS) sector 

codes 54 (professional, scientific, and technical services—hereafter, simply, professional and technical services), 55 (management 

of companies and enterprises), and 56 (administrative and support 

and waste management and remediation services, or, for simplicity, administrative and waste services). (See North American Industry Classification System: United States, 1997 (U.S. Census Bureau, 

1997), and North American Industry Classification System, 2002 (U.S. 

Census Bureau, 2002).)

 3 The temporary help services employment series starts in 1990; 

therefore, the high point reached in 1990 may not have been a peak 

had earlier data been available.

 4 A recent expression of this notion appears in “OOChart: Temporary Measures,” Occupational Outlook Quarterly, fall 2010, http://

www.bls.gov/opub/ooq/2010/fall/oochart.pdf (visited Jan. 10, 2011).

 5 Job openings rates used in this article are from the Job Openings 

and Labor Turnover Survey (JOLTS), conducted by the Bureau of 

labor Statistics; JOLTS is a monthly survey that addresses the need for 

data on job openings, hires, and separations. For more information 

on this survey, see “Job Openings and Labor Turnover Survey” (U.S. 

Bureau of Labor Statistics, Jan. 12, 2011), http://www.bls.gov/jlt/

jltover.htm#purpose. (visited Apr. 21, 2011).

 6 The third sector, management of companies and enterprises, is 

considered a minor sector relative to the other two.

 7 Data are from input-output tables published by the Bureau of 

Economic Analysis—specifically, the industry-by-industry total requirements table after redefinition for 2002. (See “Interactive Access 

to Input-Output Accounts Data,” in Industry Economic Accounts (Bureau of Economic Analysis, Dec. 14, 2010), http://www.bea.gov/

industry/iotables/options_list.cfm?aggregations_id=0&get_

results=show&goto=&anon=760683&CFID=2157277&CFTOKE

N=16910fa36c94132a-6F4D30E6-D4EF-5919-1250FF52D5214

327&jsessionid=9230a8d613dace131e78711f6072716b4444 (visited Jan. 10, 2011).) The table shows the amount of output required, 

directly and indirectly, by each industry to deliver a dollar of final 

demand to final users.

 8 Data on sales of new homes appear courtesy of the Census Bureau, in “Houses Sold by Region” (U.S. Census Bureau, no date), 

http://www.census.gov/const/soldreg.pdf (visited Apr. 21, 2011). 

Data on sales of existing homes appear courtesy of the National Association of Realtors®

, in “Existing-Home Sales” (Chicago, National 

Association of Realtors, Mar. 21, 2011), http://www.realtor.org/

research/research/ehsdata (visited Apr. 21, 2011).

9

 Bankruptcy data presented in this article are taken from the quarterly business filings by year in “Bankruptcy Filing Statistics—Business Filings” (Alexandria, va, American Bankruptcy Institute, 2010), 

http://www.abiworld.org/AM/Template.cfm?Section=Business_

Bankruptcy_Filings1&Template=/TaggedPage/TaggedPageDisplay.cfm&TPLID=59&ContentID=36301 (visited Jan. 10, 2011).

 10 Law firm performance was gauged by the Hildebrandt peer 

monitor index (PMI), a composite index that yields a score representing the quarter-over-quarter change in drivers of law firm profitability, including rates, demand, productivity, and expenses. (For more 

details on this index, see “PMI Rises in Fourth Quarter, Flat for 

2010—Law Firm Market Demand and Productivity Rise” (Washington, dc, Thomson Reuters, Jan. 28, 2011), https://peermonitor.

thomsonreuters.com/ThomsonPeer (visited Apr. 21, 2011).)

11 According to NAICS, the architectural and engineering services 

industry group is composed of establishments engaged primarily in 

planning and designing residential, institutional, leisure, commercial, and industrial buildings and structures by applying knowledge of 

design, construction procedures, zoning regulations, building codes, 

and building materials. Furthermore, architectural and engineering 

services and the construction industry exhibit a positive correlation in 

employment, which means that their employment levels tend to move 

together over time.

12 See “New Residential Construction (Building Permits, Housing 

Starts, and Housing Completions),” in Manufacturing, Mining, and 

Construction Statistics (U.S. Census Bureau, December 2010), http://

www.census.gov/const/www/newresconstindex.html (visited Jan. 

10, 2011). For an overview of construction employment trends during the December 2007–June 2009 recession, see Adam Hadi, “Construction employment peaks before the recession and falls sharply 

throughout it,” this issue, pp. 24–27.