Transcripts of the monetary policymaking body of the Federal Reserve from 2002–2008.

David, with all the problems that labor indicators provide us, one striking thing in the recent report is that the service sector is what pulled the fat out of the fire. If my memory is correct, 83 percent of our employment is now in the service sector, over 70 percent of our output, and perhaps a greater percentage of value added. If you look at the numbers, there are, for example, more health care workers than manufacturing workers. There are perhaps as many in the entertainment/restaurant sector as in the manufacturing sector. So here’s the question: Have we been able to identify any service sector subsectors that can be useful as indicators of turning points in the business cycle, as we often point to autos and durable goods? As we move up the value- added ladder through the service-sector-driven economy, the numbers are so big. It does concern me that we constantly refer to the old cyclical indicators, which are no doubt very important, but I’m wondering if we have been able to identify some subsectors in the service area that indicate turning points in the business cycle.

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