The labor market improved in February, and the jobs Oscar goes to... Hollywood?
The entire U.S. economy added 236,000 jobs in February, but the film industry deserves a special shout-out. This sector alone added 21,000 jobs, marking a 5% employment boost in motion picture and sound jobs in just one month.
This is highly unusual, and while the data can be choppy from month to month, it is not a statistical fluke, said John Mullins, a Bureau of Labor Statistics economist. The Labor Department double checked the numbers, as it always does when there's a weird change, and what it found was, production firms did in fact report stronger hiring.
Film production jobs tend to increase every February, but recently the gains are accelerating, reflecting a broader economic recovery, said Eduardo Martinez, a senior economist at Moody's Analytics.
He points to more production permits filed in Los Angeles, particularly for commercials.
On-location production permits for commercials rose 14% in 2012, compared to the year earlier, according to Film L.A. This in itself could be a mini economic indicator, showing advertisers are now more confident in the strength of the U.S. consumer and willing to spend more on promoting their products.
"Companies have more money now to spend on advertising and the entertainment companies are willing to spend a little bit more," Martinez said. "This is a vote of confidence among production companies."
Los Angeles production permits for filming movies have also increased, albeit at a slower pace than commercials. They rose 3.7% in 2012.
"My conjecture is that Hollywood thinks that with the economy turning around, it's going to be a better year in the summer and late in the year when blockbusters tend to be released," said Stephen Bronars, senior economist with Welch Consulting. "They seem to be spending more and hiring more on the production of movies."
The movie business enjoyed record box office last year and many media stocks have been rallying hard as a result. So that theory does make sense.
Other industries are also betting on a stronger U.S. consumer. Leisure and hospitality, a category that includes restaurants, bars, arts and entertainment hired 24,000 workers in February.
"It seems to be indicative of a greater willingness of consumers to open their wallets and increase spending," said Robert Kleinhenz, chief economist at the L.A. County Economic Development Corporation.
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