By: George Mentz
Historically, employment in financial activities  has been affected little by economic downturns and usually has grown during an entire recession or started to grow shortly after a recession began. In stark contrast, employment in financial activities grew more slowly in 2006 and eventually peaked in December 2006, 1 year before the official start of the December 2007–June 2009 recession.
Even after the recession ended, employment in financial activities continued to decline. Leading into the 2007-09 recession, most employment losses in financial activities were concentrated in industries directly involved in buying and selling homes.
However, after the stock market declined sharply in September 2008, all industries within the financial sector began to cut jobs at unprecedented rates. These employment losses were uncharacteristic compared with those sustained in previous downturns.
Prerecession housing crash
Over the past decade, employment changes in financial activities were tied closely to those in construction. Between 2000 and 2006, roughly 40 percent of the job growth in financial activities occurred in industries directly related to the selling and buying of homes. During this period, construction employment grew by 976,000, sales of new and existing homes increased by 14 percent and 26 percent, respectively, home prices in the top 20 major metropolitan areas in the United States doubled, 7 and mortgage rates reached historical lows. 
Combined, employment in real estate credit, mortgage and nonmortgage brokers, and real estate agents and brokers reached a prerecession employment high in April 2006, corresponding with an employment peak in the construction industry, and then declined by 184,000 through December 2007.
Real estate credit and mortgage and nonmortgage brokers respectively lost 32 percent and 34 percent of their workforce during this period. Job losses continued through the end of the recession, although at a slower pace. Between April 2006 and December 2010, housing-related financial industries lost 348,000 jobs and employment fell to its lowest level since January 1998.
Depository institutions, such as commercial banks and savings institutions, started to announce job cuts, and many underwent internal restructuring and discontinued nontraditional loan lending. Employment in depository credit intermediation peaked in September 2007, leading the recession by 3 months. In October 2008, the financial markets experienced large losses, including a 17-percent decline in value according to the S&P 500 index. 
Commercial banks substantially decreased new loans and leases in bank credit. Job losses in depository credit intermediation accelerated, and employment fell at a record pace until reaching a trough in April 2010. In 2009, loans and leases by commercial banks fell by 10.3 percent. 
Without credit, most firms were in unsustainable budgetary situations and cut payrolls. Employment losses throughout the economy were tied to the inability of firms to attain credit to continue their day-to-day business activities.
Financial crisis and job losses
With ongoing job losses occurring in financial activities industries related to the housing market crash, a financial crisis that began after the start of the recession pushed losses into other industries within the sector. Employment in the sector of securities, commodity contracts, and investments had been largely unaffected during the first 9 months of the recession, but after the deterioration of the financial markets, job cuts quickly followed: between September 2008 and June 2009, 55,000 jobs were lost.
Employment in insurance carriers and related activities also was unaffected during the first 9 months of the recession. However, year-over-year real personal consumption expenditures in insurance began to decline in April 2008 and accelerated as the recession grew more severe. 
With large layoffs occurring in most segments of the economy, households continued to cut back on personal consumption expenditures; insurance expenditures decreased at an annualized rate of 4.7 percent during the fourth quarter of 2008.
New individual life insurance premiums, the main revenue stream for life insurance companies, dropped 14 percent that quarter.  The decline in personal consumption expenditures, followed by contracting credit markets, coincided with large layoffs in insurance carriers.
Over the last 3 years, the financial industry worldwide has struggled to come back. Many banks and other institutions are dealing with sustained losses, foreclosures, losses in clients due to unemployment, and new cumbersome regulations.
Overall, there is continued consolidation in banking along with mergers and acquisitions. Growth of financial businesses and institutions worldwide in Asia, Middle East, Africa, India and Latin America are all continuing to expand. The demographics in India, China and Latin America also support a growing demand for banking and professional services. In the end, the GFC Global Financial Crisis will be over through a combined global expansion of demand, customers, and jobs.
George Mentz, JD, MBA, CWM - is an international lawyer, editor, author and contributor in the areas of management consulting, personal finance, securities law, and wealth management. Prof. Mentz continues to consult with the US Government and United Nations on issues related to careers and education. Dr. Mentz is the first person in the US to obtain quad credentialing as a lawyer, Double Accredited MBA, Juris Doctorate Degree, financial consultant certification, and qualified financial planner. Mentz and his educational & professional development firms have worked with thousands of executives and industry workers in over 150 countries. www.FinancialAnalyst.org Mentz as a professor has personally taught over 200 business, ethics, wealth management, and law courses at various accredited institutions, and he is the founder of the Mentz Consumer Protection, Class Action, and Securities Law Firm www.securitieslawyers.us Mentz has served on the advisory boards of the: The African Economists Association, The Royal Society of Fellows, The Arab Academy of Banking & Finance, The China Wealth Council, The World E-Commerce Forum, The GFF Global Finance Forum in Switzerland, and the Indian Academy of Financial Management. Mentz has been a pioneer in promoting accredited program courses, exams and standards as a government recognized path to professional development. . www.georgementz.com Formally with a International Wall Street Firm, Mentz has passed NASD FINRA Exams and held licenses as an Investment Advisor. Mentz also consults on major securities class action litigation and consumer fraud cases and has provided insights as an expert in Arbitration. . Mentz is a award winning professor and author and is the winner of a meritorious gold medal for charitable service. Mentz has been seen on TV, Radio, and International Press along with being a keynote speaker for national and international seminars or conferences.
See North American Industry Classification System: United States, 1997 (U.S. Census Bureau, 1997), and North American Industry Classification System, 2002 (U.S. Census Bureau, 2002)) industry sectors 52, or “finance and insurance,” and 53, or “real estate and rental and leasing.”
 CES data, see “Current Employment Statistics – CES (National)” (U.S. Bureau of Labor Statistics, no
date), www.bls.gov/ces. Last Accessed August 14, 2011.
 See Bureau of Labor Statistics. Monthly Labor Review. April 2011.
 See “S&P 500” New York, Standard & Poor’s. http://www.standardandpoors.com/indices/sp500/en/us/?indexId=spusa-500-usduf–p-us-l–. visited Apr. 12, 2011).
 See “Assets and Liabilities of Commercial Banks in the United States (Weekly) – H.8”. Board of Governors of the Federal Reserve System. Apr. 1, 2011. http://federalreserve.gov/releases/h8/current/default.htm. Last Accessed Apr. 12, 2011.
 See “Table 2.4.6U. Real Personal Consumption Expenditures by Type of Product, Chained Dollars,” entry 264. Bureau of Economic Analysis. Mar. 28, 2011. http://www.bea.gov/national/nipaweb/nipa_underlying/TableView.asp?SelectedTable=18&FirstYear=2009&LastYear=2010&Freq=Qtr&ViewSeries=Yes. Last Accessed Apr. 12, 2011.
 See “LIMRA Reports Sharp Quarterly Drop in Individual Life Insurance Sales”. Windsor, CT, LIMRA International, Feb. 24, 2008. http://www.limra.com/newscenter/newsarchive/archivedetails.aspx?prid=83. Last Accessed Apr. 12, 2011.