Financial Activities Industry

The financial activities supersector is made up of two parts: the finance and insurance sector (sector 52), and the real estate and rental and leasing sector (sector 53).

The finance and insurance sector comprises establishments primarily engaged in financial transactions (transactions involving the creation, liquidation, or change in ownership of financial assets) and/or in facilitating financial transactions. Three principal types of activities are identified:

1. Raising funds by taking deposits and/or issuing securities and, in the process, incurring liabilities.
2. Pooling of risk by underwriting insurance and annuities.
3. Providing specialized services facilitating or supporting financial intermediation, insurance, and employee benefit programs.

The real estate and rental and leasing sector comprises establishments primarily engaged in renting, leasing, or otherwise allowing the use of tangible or intangible assets, and establishments providing related services. The major portion of this sector comprises establishments that rent, lease, or otherwise allow the use of their own assets by others. This sector also includes establishments primarily engaged in managing real estate for others, selling, renting and/or buying real estate for others, and appraising real estate.

Data from the Quarterly Census of Employment and Wages program show that, in the economy as a whole, finance and insurance represents about 4.4 percent of all employment and about 5.2 percent of all establishments. Real estate and rental and leasing is only about 1.6 percent of all employment yet makes up about 3.9 percent of all establishments.

Estimates from the Current Employment Statistics for financial activities over the 1994 - 2003 period show annual average employment at 6,867,000 at the beginning of the period; during 2003, financial activities employment averaged 7,974,000 - an all-time high.

• Average annual employment of nonsupervisory workers in financial activities was 5,183,000 in 1994; in 2003, employment of nonsupervisory workers in financial activities averaged 5,965,000, an all-time high.

• The annual average of the average weekly hours of nonsupervisory workers in financial activities was 35.5 in 2003; the private industry average for production and nonsupervisory workers was 33.7.

• The average hourly earnings of nonsupervisory workers in financial activities was $17.13 in 2003.

In 2003, according to the Current Population Survey, the unemployment rate of persons most recently employed in financial activities was 3.5 percent. The overall unemployment rate was 6.0 percent that year.

Data from the Mass Layoff Statistics program show that in 2002

• in finance and insurance, there were 200 extended mass layoff events, resulting in 38,692 separations of workers from their jobs, and 36,970 initial claimants for unemployment insurance;

• in real estate and rental and leasing, there were 17 extended mass layoff events, 2,944 separations, and 2,793 initial claimants.

Employment Projections data indicate that financial activities employment will increase 12.3 percent over the 2002-12 period. Total employment for all industry sectors is projected to grow 14.8 percent.

The Productivity and Costs program publishes estimates of labor productivity for three financial activities industries, including commercial banking.

The Producer Price Index program publishes data for many financial activities industries.

In 2003, there were 130 fatal occupational injuries in financial activities and 122,500 nonfatal injuries and illnesses, according to data from the Injuries, Illnesses, and Fatalities program. The nonfatal injuries and illnesses incidence rate was 1.7 per 100 full-time workers in financial activities and 5.0 per 100 full-time workers in all private industry.

Some businesses in this industry are:

Information courtesy of the U.S. Bureau of Labor Statistics.