The finance sector gained 2,000 jobs last month, according to the Bureau of Labor Statistics, but continued fears over the eurozone crisis will drive job cuts over the coming months, economists say.
Insurance carriers and related activities gained 3,300 jobs, while credit intermediation and related activities, which signifies activity at commercial banks and mortgage companies, gained 2,800 jobs. Securities, contracts and investments, the category under which most jobs at investment banks fall, lost 3,900 jobs in December.
"There have been very small gains in most months, and I'm still very cautious on the outlook," said Nigel Gault, chief U.S. economist with IHS Global Insight, an Englewood, Colorado-based financial and economic forecasting firm. "I'm expecting some negative numbers to come through."
Julie Steinberg talks about the December jobs report on WSJ.com's Lunch Break.
Gault referenced yesterday's Challenger report, which reported more than 64,000 announced job cuts in the sector, nearly triple the amount from 2010.
"These cuts will take awhile to come through, and some won't occur in the U.S., but it's still a very risky environment for the industry," Gault said.
Because the situation in Europe is still unresolved, companies will continue to be cautious and lean toward job reductions rather than job growth, he believes.
Nearly all the big banks in the U.S. and Europe have announced job reductions in the thousands in recent months. Last month Morgan Stanley said it would cut 1,600 jobs.
The broader economy added 200,000 jobs in December and the unemployment rate fell to 8.5% from a revised 8.7% a month earlier. Earnings went up in December, which contributed to higher household incomes and more spending power, Gault said.
Economists polled by Dow Jones had expected 155,000 jobs added to payrolls and a jobless rate of 8.7%.
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