22  Monthly Labor Review • March 2013

Payroll Employment in 2012

Sutton E. Puglia

and 

Parth A. Tikiwala According to data from the Current 

Employment Statistics (CES) survey,1

 employment growth in 2012 

totaled 2.2 million and was spread among 

most major industries, some of which had 

more substantial gains than others. During the year, nonfarm payroll employment 

continued to trend upward, averaging an increase of 183,000 per month, similar to the 

growth in 2011. (See chart 1.) This article 

examines several of the notable movements 

that occurred during the year.

By December 2012, 34 months after the 

end of one of the most severe employment 

downturns in history, the U.S. economy had 

recovered 5.4 million of the 8.7 million decline in nonfarm payroll employment that 

had taken place from January 2008 to February 2010. (See chart 2.) To put the latest 

employment recovery into perspective, the 

most recent employment downturn2 lasted 

25 months, and nearly 3 years after the 

employment series’ most recent trough, the 

U.S. economy had recovered only 62 percent 

of the net employment loss from peak to 

trough. None of the previous five employment downturns were as long in length, had 

as large a decline in jobs, nor were followed 

by a recovery that required as many months. 

The downturn of June 1990, for example, 

lasted 17 months, and a full recovery was 

reached 21 months after the employment 

Slow and steady: payroll employment 

grew moderately in 2012

Although nonfarm payroll employment ended the year 3.4 million below 

the series’ peak, the number of jobs increased by 2.2 million in 2012; 

employment growth took place in most major industries, and the 2012 

nonfarm payroll gains kept pace with the previous year’s advances

Sutton E. Puglia and 

Parth A. Tikiwala are both 

economists in the Division of Current Employment Statistics, Office

of Employment and

Unemployment Statistics,

Bureau of Labor Statistics.

Email: Puglia.Sutton@bls.

gov and Tikiwala.Parth@

bls.gov.

trough. (See table 1 and chart 3.) 

Other indicators, hours, and earnings

Like nonfarm payroll employment, the 

majority of the other economic indicators 

were largely positive in 2012. Gross domestic product rose by 2.2 percent in 2012, 

with the strongest growth occurring in the 

third quarter of the year.3 The Conference 

Board’s leading and coincident economic 

indexes both grew modestly in 2012.4 Average weekly hours of production and nonsupervisory employees in manufacturing, a 

component of the leading economic index, 

increased by 0.2 hour between December 

2011 and December 2012; they reached a 

high point in February 2012 and ended the 

year at that level.5 On the other hand, average weekly hours for production and nonsupervisory employees on total private payrolls were unchanged on net over the same 

12-month period.6

Temporary help services employment, 

often used as a leading indicator of total 

nonfarm job growth, grew by 7.3 percent 

over the year, substantially faster than the 

total private employment growth rate of 

2.1 percent. Average hourly earnings of 

employees in the private sector grew by 2.1 

percent in 2012, the highest rate of growth 

over a calendar year since 2008. Overall, the 
Monthly Labor Review • March 2013  

Chart 2. Total nonfarm employment, seasonally adjusted, January 2000–December 2012

Thousands Thousands

NOTE: Shaded areas represent recessions as determined by the National Bureau of Economic Researc

SOURCE: U.S. Bureau of Labor Statistics.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

140,000

138,000

136,000

134,000

132,000

130,000

128,000

140,000

138,000

136,000

134,000

132,000

130,000

128,000

Chart 1. Over-the-month change in total nonfarm employment, seasonally adjusted, January 2011–

December 2012

Thousands Thousands

SOURCE: U.S. Bureau of Labor Statistics.

Jan Mar May July Sept Nov Jan Mar May July Sept Nov

350

300

250

200

150

100

50

0

350

300

250

200

150

100

50

0

2011 2012

Average over-the-month

change in 2011: 175,000 Average over-the-month

change in 2012: 183,000
Payroll Employment in 2012

24  Monthly Labor Review • March 20

Table 1. Total nonfarm employment decrease, by downturn and number of months to recover

Peak-to-trough period1 Jobs lost during 

downturn, in thousands

Number of months

to recover jobs lost

March 1970–November 1970 1,044 10

July 1974–April 1975 2,171 10

July 1981–December 1982 2,838 11

June 1990–May 1991 1,626 21

February 2001–August 2003 2,698 18

January 2008–February 2010 8,736 342

1 These are employment peak-to-trough periods, not the business cycle peaks and troughs determined by the National Bureau of Economic Research. 2 December 2012 marks 34 months of ongoing recovery, 3.4 million jobs short of full recovery.

SOURCE: U.S. Bureau of Labor Statistics.

101

100

99

98

97

96

95

94

93

101

100

99

98

97

96

95

94

93

Chart 3. Total nonfarm employment indexed to employment peaks, seasonally adjusted, March 1970–

December 2012

Index (peak=100) Index (peak=100)

NOTE: The black diamond indicatesthe employment trough for each series. To the left of each trough isthe employment downtu

(peak-to-trough period), and to the right of each trough are the months of recovery.

SOURCE: U.S. Bureau of Labor Statistics.

0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 59

Number of months after employment peak

Mar. 1970–

Nov. 1970

July 1974–

April 1975

July 1981–

Dec. 1982

June 1990–

May 1991

Feb. 2001–

Aug. 2003

Jan. 2008–

Feb. 2010

majority of economic indicators showed moderate growth 

in 2012, posting gains similar to those in total nonfarm 

employment. 

Strong employment growth

Nearly all the major industries in the private sector experienced job growth in 2012 as they continued to build 

upon the growth trends seen in 2011. Over the 12-month 

period ending in December 2012, the diffusion index for 

total private employment was 75.6. An index value of 50 

or more indicates that more industries are adding than 

losing jobs. The dispersion of job growth in 2012 across 

industries was improved slightly over 2011 and was markedly improved compared with the low of 12.8 reached in 

August 2009.

While job growth occurred in a majority of detailed 

industries in 2012, more than 60 percent of the employment growth in 2012 came from three major industry 

sectors—professional and business services, leisure and 

hospitality, and education and healthcare. (See chart 4.) 

These three major sectors account for approximately 22 

percent of the industries that make up the diffusion index. The year 2012 was the second consecutive one during which no net job losses occurred in any of the privatesector industries. Employment in the information and 
Monthly Labor Review • March 2013  

Chart 4. Distribution of private sector employment gains, seasonally adjusted, December 2011–December 2012

Thousands

NOTE: Employment in the information and utilities sectors was essentially unchanged in 2012.

SOURCE: U.S. Bureau of Labor Statistics.

Mining and logging

Construction

Manufacturing

Wholesale trade

Retail trade

Transportation and Education and health 

Leisure and 

hospitality

Other services

Transportation and

warehousing

Financial activities

Professional and 

business services

services

27

68 99

103

141

230

111

360 154

416

564

utilities sectors was essentially unchanged in 2012.7

Employment growth in professional and business 

services continued in 2012. This sector added 564,000 

jobs, an average of 47,000 per month, accounting for a 

quarter of the total nonfarm over-the-year job growth. 

Job growth in professional and business services was 

propelled by gains in temporary help services, computer 

system design and related services, and management and 

technical consulting services.

Continued job growth in computer systems design and 

related services and in management and technical consulting services contributed 25 percent of the employment 

gain seen in the professional and business services sector. 

Temporary help services makes up 14 percent of the 

employment in the professional and business services sector yet was responsible for more than 30 percent of the 

employment gains. Traditionally, the trend in temporary 

help services employment has led the employment trend 

in total nonfarm employment. (See chart 5.) Temporary 

help services added 174,000 jobs in 2012, continuing the 

similarly strong growth the industry had experienced 

in the previous year. However, the rate of employment 

growth lessened towards the end of 2012. Growth over 

the past 2 years placed temporary help services at 90 percent recovery of the 911,000 jobs lost during the industry’s last downturn (August 2006 to August 2009). 

Major indicators related to industries within professional and business services, such as International Strategy and Investment’s temporary help survey, showed 

similar signs of growth during the year.8 The Conference Board Help Wanted Online data series, a leading 

indicator of labor demand, ended 2012 with in excess of 

500,000 more help-wanted job postings than were posted 

at the end of 2011; in December 2012, there were 4.9 

million help-wanted advertisements posted.9 Professional 

and business services had shed 1.7 million jobs between 

December 2007 and August 2009. The industry had fully 

recovered the jobs lost as 2012 came to a close.

The leisure and hospitality sector experienced consistent job gains in 2012 that were similar to the job growth 

experienced in 2011; 360,000 jobs were added in 2012. 

(See chart 6.) As of January 2012, the industry had recovered all of the 616,000 jobs lost during the December 2007– December 2009 contraction, and employment 

continued expanding throughout 2012. 

Similar to previous years, nearly all of the job growth 

in leisure and hospitality occurred in food services and 

drinking places, which grew by 300,000 jobs over the 

year. Employment in other components of leisure and 

hospitality—arts, entertainment, and recreation, and 
Payroll Employment in 2012

26  Monthly Labor Review • March 20

Chart 5. Total nonfarm and temporary help services employment, seasonally adjusted, January 1990–

December 2012

Total nonfarm

(thousands) Temporary help services

(thousands)

NOTE: Shaded areas represent recessions as determined by the National Bureau of Economic Researc

SOURCE: U.S. Bureau of Labor Statistics.

140,000

135,000

130,000

125,000

120,000

115,000

110,000

105,000

100,000

2,800

2,600

2,400

2,200

2,000

1,800

1,600

1,400

1,200

1,000

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Temporary help

services

Total 

nonfarm

Chart 6. Leisure and hospitality and food services and drinking places employment, seasonally adjusted, 

January 2000–December 2012

Leisure and hospitality

(thousands)

Food services and

drinking places

(thousands)

NOTE: Shaded areas represent recessions as determined by the National Bureau of Economic Researc

SOURCE: U.S. Bureau of Labor Statistics.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2

14,000

13,500

13,000

12,500

12,000

11,500

11,000

10,500

10,000

9,500

9,000

8,500

8,000

Food services and

drinking places

Leisure and

hospitality
Monthly Labor Review • March 2013  

accommodation—changed little over the year. The employment gains experienced in food services and drinking 

places in 2012 were reflective of major indicators for the 

industry. The National Restaurant Association’s Restaurant Performance Index, which measures sales, traffic, labor, and capital expenditures, continued to trend upward 

for the second consecutive year.10 Also, food services and 

drinking places sales, as published by the U.S. Census 

Bureau, ended the year up 7.7 percent over the December 

2011 level.11

Employment in education and health services continued to register healthy gains, which totaled 416,000 

in 2012. Most of the employment gains came from the 

health care industry, which added 321,000 jobs during 

the 12 months that ended in December 2012. The overthe-year health care industry employment increase was 

concentrated in selected ambulatory health care services, 

as shown by this tabulation:

Industry Employment change

Ambulatory health care services .............. 208,000

Offices of physicians ............................. 56,000

Outpatient care centers ........................ 39,000

Home health care services ................... 78,000

Hospitals .................................................. 73,000

Nursing and residential care facilities ...... 39,000

Within health care, employment in ambulatory care 

grew at the most rapid pace, 3.4 percent. Job growth 

was largely concentrated in three components: offices of 

physicians, outpatient care centers, and home health care 

services. Hospitals and nursing and residential care also 

added jobs in 2012, but at a slower pace than other industries within the health care services sector.

Historically, health care services employment has 

tended to be fairly recession proof; the industry has experienced strong and continuous employment growth since 

1990 (the first year for the employment series) and has 

grown steadily even during the last three recessionary periods. (See chart 7.) Job gains in the industry are highly 

correlated with the aging baby boomer12 population as 

well as advancements in medical technologies, which can 

drive up demand for new procedures.13 The positive employment trend in health care services is the most consistent among all major sectors. 

Moderate employment growth 

In 2012, retail trade employment increased by 230,000 

in the third consecutive year of job gains. Employment 

gains in retail trade generally correlate positively with 

Chart 7. Indexed total nonfarm and health care employment, seasonally adjusted, January 1990–December 2012

Index (January 

2008=100)

Index (January 

2008=100)

NOTE: Shaded areas represent recessions as determined by the National Bureau of Economic Researc

SOURCE: U.S. Bureau of Labor Statistics.

120

110

100

90

80

70

60

120

110

100

90

80

70

60 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Health care

Total 

nonfarm
Payroll Employment in 2012

28  Monthly Labor Review • March 20

retail sales, which increased by 4.7 percent in 2012.14 Although consumer confidence ended the year 2.0 points 

stronger than in December 2011,15 the Confidence Index 

oscillated for the majority of 2012, indicating that while 

the retail industry continued to recover, consumers were 

still cautious. 

Half of the 2012 employment growth in the retail 

trade industry occurred in clothing and clothing accessories stores and in food and beverage stores. The employment gain in clothing and clothing accessories stores was 

spread across most of the components, with the gain in 

family clothing stores being the largest. Of the 53,000 

increase in food and beverage stores employment in 2012, 

82 percent was from an increase in grocery store jobs.

Staying consistent with its job growth trend from the 

previous year, motor vehicle and parts dealers posted an 

over-the-year gain of 31,000 jobs. Vehicle sales increased 

by 1.4 million units over the same period, with dealers 

selling upwards of 15 million vehicles in 201216 despite 

gas prices averaging more than $3.80 per gallon.17 

Since the most recent retail trade employment trough 

in December 2009, employment in the industry expanded 

by an average of 1.5 percent annually. Despite this consistent growth, retail trade employment remained 572,000 

below its most recent employment peak (which was in 

November 2007) as 2012 came to a close.

Manufacturing indicators continued to signal improvement during 2012. New orders for manufactured goods 

increased by 3 percent over the year,18 and industrial 

production rose by 2.2 percent over the year.19 Although 

employment showed little net change after July, manufacturing had another year of modest employment gains in 

2012 with an increase of 154,000. Average employment 

growth for the sector, 13,000 per month, was slightly 

weaker than the previous year’s average gain of 17,000 per 

month. Since the 1970s, manufacturing employment has 

rarely fully recovered from its downturns. (See chart 8.) 

Manufacturing lost 3 million jobs during its most recent 

downturn (August 2004 to February 2010) and through 

December 2012 had recovered 491,000 of them.

In 2012, motor vehicle and parts manufacturing added 

45,000 jobs as increased demand fueled vehicle sales and 

expanded the production of motor vehicles. Showing a 

trend similar to that of the prior 2 years, fabricated metal 

products also turned in sizable employment growth in 

2012, increasing by 48,000. 

Transportation and warehousing employment increased by 141,000 over the year. The American Trucking 

Chart 8. Manufacturing employment, seasonally adjusted, January 1968–December 2012 

Thousands Thousands

NOTE: Shaded areas represent recessions as determined by the National Bureau of Economic Researc

SOURCE: U.S. Bureau of Labor Statistics.

20,000

19,000

18,000

17,000

16,000

15,000

14,000

13,000

12,000

11,000

20,000

19,000

18,000

17,000

16,000

15,000

14,000

13,000

12,000

11,000

1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008
Monthly Labor Review • March 2013  

Association’s Truck Tonnage Index, used as an indicator 

of shipping activity in the United States, increased by 2.3 

percent in 2012.20 Overall, transportation and warehousing posted a job gain in 2012, but as the year came to 

a close, employment was still 67,000 below its most recent employment peak in April 2008. The majority of the 

2012 employment increase occurred in truck transportation (up by 49,000) and in warehousing and storage (up 

by 30,000). 

Couriers and messenger services ended 2012 with 

sizable job gains in November and December as a result 

of stronger-than-usual seasonal hiring. Strong seasonal 

layoffs in early 2013, however, largely offset the year-end 

strength in this industry.

Construction employment continued to trend upward, 

gaining 99,000 jobs in 2012 after increasing by 144,000 

in 2011. The majority of the job growth in 2012 came 

in the last 3 months of the year. In 2012, specialty trade 

contractors provided more than half the growth in the 

construction industry, adding 56,000 jobs. Construction had lost 2.3 million jobs from April 2006 to January 

2011. By December 2012, however, the construction sector had recovered 276,000 jobs. 

Economic indicators pointed to improvement in construction during 2012. Housing units authorized by 

building permits were 30.3 percent higher than in 2011, 

while housing starts increased by 28.1 percent over the 

year.21 Construction expenditures, a measure of the total 

dollar value of construction work done in the country, 

continued its steady increase for the second consecutive 

year.22 At the end of October 2012, Superstorm Sandy 

made landfall on the East Coast, consequently causing 

billions of dollars in damage to the economy.23 This storm 

most likely contributed to employment growth through 

increased repair and rebuilding efforts that continued 

through the end of the year. The Remodeling Market 

Index increased in the fourth quarter to levels last seen 

in 2005.24

As a result, sectors in construction showed strength 

as well. The bulk of construction job gains occurred in 

residential specialty trade construction (gaining 41,000 

jobs), which registered increases every month beginning 

in August 2012, while nonresidential specialty trade construction employment grew moderately (up by 15,000). 

Continued job losses in government 

Government employment continued to decline in 2012 

with a loss of 76,000 jobs. Job losses in government were 

split between federal jobs and local government jobs. 

State government employment was essentially unchanged 

with no major movements in its components, as shown by 

the following tabulation of the over-the-year change in 

employment: 

Industry Employment change

Total government............................... -76,000

Federal............................................. -42,000

State ............................................... -2,000

Local .............................................. -32,000

Within federal government, the U.S. Postal Service 

continued to experience financial difficulties, and 2012 

marked its fifth straight year of employment declines,25 

losing 16,000 jobs during the year. The U.S. Postal Service has lost more than 17 percent of its entire workforce 

since 2008. 

Local government employment—which had declined 

by 575,000 by the end of 2012 after reaching a peak in 

July 2008—experienced a slower rate of job loss in 2012: 

the average decline was 3,000 per month in 2012, down 

from 16,000 per month in 2011 and 20,000 per month 

in 2010. This improvement stems from slowing job losses 

in both components of local government. In 2010, jobs 

losses in local government excluding education averaged 

10,000 per month and then slowed the following year before holding fairly steady in 2012. Job losses in local government education averaged 10,000 per month in 2010 

and 12,000 per month in 2011 before slowing to 3,000 

per month in 2012.

More than 2.2 million private payroll jobs were 

added in 2012, while job losses in government decelerated. The 2012 employment increase accounted for 

41 percent of the jobs recovered since the employment 

trough in February 2010. However, as of December 

2012, employment was still 3.4 million below its January 

2008 peak.

Several sectors continued their upward employment 

trends in 2012. Professional and business services sector and the leisure and hospitality sector both recovered 

to their prerecessionary employment levels. Health care 

employment continued to expand. Employment gains in 

other industries increased, although at a more moderate 

pace than those three sectors. Manufacturing, wholesale 

trade, and retail trade all ended 2012 with gains. Government, on the other hand, continued to shed jobs over the 

year. 
Payroll Employment in 2012

30  Monthly Labor Review • March 20

Notes

1 The Current Employment Statistics (CES) program is a monthly 

survey of about 145,000 businesses and government agencies, representing approximately 557,000 individual worksites. For more information on the program’s concepts and methodology, see “Technical notes 

to establishment survey data,” http://www.bls.gov/ces/#technical. To 

access CES data, see “Current Employment Statistics–CES (national),” 

http://www.bls.gov/ces. The CES data used in this article are seasonally adjusted unless otherwise noted.

2 An employment downturn is defined as the period after an employment series has peaked until the series eventually reaches an employment trough. 

3 To access GDP data, see “National economic accounts” (Bureau of 

Economic Analysis), http://www.bea.gov/national/index.htm#gdp.

4

 The Conference Board is a global, independent, business, 

membership and research association. To access the Board’s coincident 

and leading index data, updated at least daily, see “Global business 

cycle indicators” (New York: The Conference Board), http://www.

conference-board.org/data/bcicountry.cfm?cid=1.

5 Aggregate weekly hours are the product of employment and average weekly hours. The index is calculated by dividing the monthly 

aggregates by the annual average of aggregate weekly hours for 2007.

6 Aggregate weekly payrolls are the product of employment, aggregate weekly hours, and average hourly earnings. The index is calculated 

by dividing aggregate weekly payrolls by the annual average of aggregate payrolls for 2007.

7 The change in employment the information and utilities industries 

was statistically not different from zero in 2012.

8

 International Strategy and Investment is a global, independent, 

membership and research association. To access International Strategy 

and Investment surveys, data, and research, see http://www.isigrp.

com/main/index.html.

9 To access The Conference Board’s Help Wanted Online Index, 

see http://www.conference-board.org/data/helpwantedonline.cfm.

10 For the National Restaurant Association’s Restaurant Performance Index, a monthly analysis of the restaurant industry’s economic 

strength (Washington, D.C.: National Restaurant Association), see 

http://www.restaurant.org/News-Research/Research/Restau 

rants-The-Economy/Restaurant-Performance-Index.

11 To access data on monthly sales for retail and food services, see 

“Advance monthly sales of retail and food services” (U.S. Census Bureau, released monthly), http://www.census.gov/retail/marts/www/

marts_current.pdf.

12 The baby-boom generation includes people born from mid-1946 

to 1964. The baby boomers came about through a dramatic increase in 

birth rates following World War II and form one of the largest generations in U.S. history. For more information, see Howard Hogan, Deborah Perez, and William Bell, “Who (really) are the first baby boomers?” 

Joint Statistical Meetings Proceedings, Social Statistics Section (Alexandria, VA: American Statistical Association, 2008), pp. 1,009–1,016.

13 See Long-term budget outlook (Congressional Budget Office, June 2009), http://www.cbo.gov/sites/default/files/cbofiles/

ftpdocs/102xx/doc10297/06-25-ltbo.pdf.

14 To access data on retail sales data, see “Advance monthly retail 

trade report” (U.S. Census Bureau, released monthly), http://www.

census.gov/retail. 

15 To access data on consumer confidence, see “Consumer measures” 

(New York: The Conference Board), http://www.conference-board.

org/data/consumerdata.cfm.

16 To access new-vehicle sales data, see “New vehicle sales” on Motor Intelligence website (Woodcliff Lake, NJ: Autodata Corporation), 

http://www.motorintelligence.com/m_frameset.html.

17 To access gas price data, see “Retail gasoline historical prices” (U.S. 

Department of Energy), http://www.eia.gov/petroleum/gasdiesel/.

18 From “Manufacturers’ shipments, inventories, and orders” (U.S. 

Census Bureau, January 28, 2013), http://www.census.gov/manufac 

turing/m3/.

19 From “Industrial production and capacity utilization,” Federal 

Reserve Statistical Release G.17 (U.S. Federal Reserve, January 16, 

2013), http://www.federalreserve.gov/releases/g17/current.

20 To access data on the Truck Tonnage Index (Arlington, VA: 

American Trucking Association, released monthly), see http://www.

truckline.com/pages/article.aspx?id=1084%2F8e1c7279-ed27-

4c03-b189-ceeee26bbb12.

21 To access data on new residential construction (housing starts 

and building permits), see “New residential construction” (U.S. 

Census Bureau), http://www.census.gov/construction/nrc/pdf/

newresconst.pdf.

22 To access data on construction spending, see “Construction 

spending” (U.S. Census Bureau), http://www.census.gov/construc 

tion/c30/c30index.html.

23 See “Superstorm Sandy LiDAR damage assessment to change 

disaster recovery,” (U.S. Department of Transportation, Research 

and Innovative Technology Administration, February 2013 release), 

http://www.rita.dot.gov/utc/sites/rita.dot.gov.utc/files/utc_spot 

lights/pdf/spotlight_0213.pdf.

24 To access data on the Remodeling Market Index, see monthly 

National Association of Home Builders “Remodeling Market Index” 

news release, http://www.nahb.org/news_details.aspx?sectionID=1

36&newsID=15714. 

25 See “United States Postal Regulatory Commission, form 10-Q” 

(U.S. Postal Service, Quarterly financial report, Feb. 8, 2013), http://

about.usps.com/who-we-are/financials/financial-conditions-re 

sults-reports/fy2013-q1.pdf.