Financial Activities Employment - Historical Chart
Financial Activities Employment. Gray shaded areas indicate U.S. recessions.
Source: Federal Reserve Bank of St. Louis (FRED), Series USFIRE. Shaded areas = NBER recession dates. Updated 2026-03-09.
Wall Street Is Cutting. Main Street Banks Are Next.
The USFIRE series -- financial activities employment -- includes banks, insurance companies, real estate firms, and the army of mortgage brokers, financial advisors, and fintech employees that fill out the sector. At 9166K workers, the industry is down by 33K jobs from a year ago.
That decline is not random noise. It reflects three structural forces converging at once.
First, the mortgage industry has been in a rolling recession since rates spiked in 2022. Origination volume is running 40-50% below the 2020-2021 peak. Every major lender has cut staff multiple times. Wholesale shops like UWM have automated aggressively. Retail lenders have closed branches. The refi boom employed tens of thousands of people who are not coming back until rates drop below 5%, and the Fed is in no rush to make that happen.
Second, regional banks are consolidating. The March 2023 failures (SVB, Signature, First Republic) triggered a slow-motion merger wave. When two $20B banks combine, the surviving entity does not need two CFOs, two compliance departments, or two branch networks. Each merger eliminates 15-25% of combined headcount. We are seeing 3-5 notable bank mergers per quarter, and the pace is accelerating.
Third, fintech is no longer hiring. The 2020-2021 vintage of fintech startups -- BNPL companies, neobanks, lending platforms -- burned through their VC funding and are either shutting down, merging, or operating with skeleton crews. The sector added roughly 200K jobs between 2019 and 2022. It has given back at least half.
The Insurance Pocket of Strength
Not everything in financial activities is contracting. Property and casualty insurance employment has held steady or grown, driven by rising premiums and the need for more claims adjusters in a world of escalating natural disasters. Health insurance administration continues to add workers as the system grows more complex. But these gains are not large enough to offset the losses in banking and real estate.
What Financial Sector Job Losses Mean for Small Business
When banks cut staff, the first positions eliminated are relationship managers and commercial loan officers -- the people who actually sit across the table from business owners and make lending decisions. Automated underwriting works fine for standardized products (mortgages, credit cards, auto loans). It works terribly for the judgment-intensive world of small business lending, where the borrower's story matters as much as their FICO score.
The result: credit availability for small businesses is tightening even though the official Fed data on lending standards shows only modest constraint. The standards have not changed much. The people who apply those standards are disappearing. A bank that had 50 commercial lenders now has 30, and each of those 30 has a larger portfolio and less time per borrower. Marginal deals -- the ones that require a human to champion them through committee -- are getting declined by default.
The Automation Question
Every bank CEO talks about AI replacing back-office staff. The reality is more nuanced. AI is excellent at document processing, fraud detection, and regulatory reporting. It is poor at complex credit analysis, relationship management, and the kind of flexible problem-solving that distressed borrowers need. Banks that cut too deep in the name of efficiency will find themselves unable to serve their most profitable customers: mid-market businesses that need customized solutions.
The 10-year average for financial activities employment is 8834K. Current employment is above that average by 332K. The peak was 9211K in May 2025. We have given back roughly 0.5% from the high.
Bottom Line
If you are a business owner who relies on a banking relationship for credit, the shrinking headcount in financial services is your problem, even if you never see it directly. Fewer bankers means slower decisions, tighter informal standards, and less willingness to work with borrowers who hit rough patches. Build relationships now, before the next wave of cuts makes your banker an endangered species.
Financial Activities Employment - Frequently Asked Questions
Financial activities employment is {value}K as of {period} per FRED series USFIRE. The sector includes banking, insurance, securities, real estate, and rental/leasing. It has been relatively stable at 8.5-9.2 million employees over the past decade.
The trend has been flat to slightly positive in aggregate, but the composition is shifting. Traditional bank branch employment is declining while fintech, compliance, and data analytics roles are growing. Insurance and real estate follow their own cycles.
Fewer loan officers at community banks means less capacity to underwrite small business loans, which require significant manual review. Large banks are automating small business lending, but businesses with complex financials still need a human underwriter.
The financial sector shed fewer jobs than most industries during COVID because many roles transitioned to remote work. PPP loan processing actually caused temporary hiring surges at some banks. Post-pandemic, the sector has been stable but faces pressure from mortgage volume declines.
Financial activities is mid-sized compared to healthcare (17M+), retail (15M+), and professional services (23M+). It is larger than information technology (3M) and mining (0.6M). The sector's stability makes it a reliable employer but a lagging indicator of economic turns.
FRED series USFIRE from the BLS Current Employment Statistics (CES) survey. Monthly, seasonally adjusted. The supersector classification follows the North American Industry Classification System (NAICS).