Weak Wall Street Jobs Outlook in September

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The Wall Street employment picture was weak in September 2021 as layoffs rose following an extremely low level of layoffs in the prior month.  Simultaneously, new hiring plans plunged In September after posting a strong level of hiring in August.  The weak September jobs data looks to be snap back from the strong data seen in August and doesn’t alter the cautiously optimistic outlook held by many bank executives about the current business climate.

September 2021 Challenger, Gray & Christmas Report

According to the September Challenger, Gray & Christmas monthly Job Cuts Report released last week, the financial services industry saw planned layoffs surge 159% to 202 layoffs in from 78 layoffs recorded during the prior month.  The September 2021 layoff total was 87% lower than the 1587 layoffs recorded during September of 2020.  During the first nine months of 2021, layoffs totaled 8,205 layoffs, 23% below the 10,687 layoffs reported during the same period last year.

New hiring in September was much weaker than what was recorded in the prior month as financial services firms announced that 1,000 new jobs were available compared to 4,500 new jobs available in August 2021.  The September 2021 hiring total was 89% lower than the total seen during September 2020 when 9,410 new jobs were available.  During the first nine months of 2021, new hiring totaled 21,861 new jobs – 23% higher than the 17,707 new jobs on offer during the same period last year.

Despite the rise in layoffs and drop in new hiring seen in September, monthly new hiring remained above layoffs, marking the ninth month over the past twelve where hiring has exceeded layoffs.  Over the past twenty-four months net new employment (new hiring less layoffs) in the financial services industry has risen by 23,215 jobs as bank executives have gradually expanded their headcount suggesting cautious optimism about the improving economic outlook in the wake of the pandemic.

Our Take

The sharp plunge in new hiring and the modest rise in layoffs that took place during September allowed monthly net employment at financial services firms to expand for the second time in the past five months.  We suspect the bullish new hiring trend seen since August of last year should continue throughout the rest of 2021 as strong IPO activity, healthy trading commission volumes, and improved economic activity boosts bank earnings. 

Despite this optimistic outlook for overall Wall Street employment, we suspect that sell-side and independent research firm’s hiring of research analyst and sales staff will remain weak throughout the remainder of 2021.  This is due, in large part, to the reticence of many asset managers to boost their research payments to their research counterparties as many asset managers now pay for third-party research out of their own pockets instead of from their client’s trading commissions.

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About Author

Mike Mayhew is one of the leading experts on the investment research industry. In addition to founding Integrity Research, Mike is on the board of directors of Investorside Research Association, the non-profit trade association for the independent research industry, and a frequent speaker on research industry trends and developments. Mike has over thirty years of research industry experience. Email: Michael.Mayhew@integrity-research.com

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