Economic Sectors

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chapter 2


The American workforce is made up of many different types of jobs that are categorized into sectors defined by the North American Industry Classification System (NAICS; pronounced "Nakes"). Adopted in 1997, NAICS was devised by the U.S. Economic Classification Policy Committee in conjunction with Statistics Canada and the Instituto Nacional de Estadística, Geografia e Informática of Mexico, and is the standard classification system for businesses throughout the continent of North America. There are twelve major industry sectors tracked by the U.S. Department of Labor's Bureau of Labor Statistics (BLS), which are referred to as supersectors. These supersectors encompass all private and public jobs within the United States and businesses owned by U.S.-based companies operating in other countries.

The twelve supersectors are:

  • Construction
  • Education and Health Services
  • Financial Activities
  • Government
  • Information
  • Leisure and Hospitality
  • Manufacturing
  • Natural Resources and Mining
  • Professional and Business Services
  • Other Services
  • Transportation and Utilities
  • Wholesale and Retail Trade

Table 2.1, developed by the U.S. Department of Commerce, Bureau of Economic Analysis (BEA), shows annual gross output (the market value of an industry's production) by industry and category between 2000 and 2003.

Virtually every job can be placed into one of these categories. It should be noted that industry tracking focuses on the core mission of the business rather than on the particular tasks performed by employees. For instance, the service industry, as defined by the government, includes businesses whose main function is to provide a service rather than a product. This is different from the popular notion of the service industry, which includes any employment position that renders service. Waiting tables, for example, is considered part of the leisure and hospitality supersector rather than the services sector; jobs in public schools and government-owned hospitals are considered part of the government sector rather than education and health services.


The construction sector includes all businesses that contribute to the development of land, roads, utilities, buildings, and such structures as bridges and dams. Included are firms that build new projects and those that provide maintenance, repairs, and alterations to existing structures. For the most part, such enterprises are managed from a central location with work performed elsewhere. The Annual Industry Accounts: Revised Estimates for 2001–2003 (Washington, D.C.: Bureau of Economic Analysis, January 2005) estimated the gross output of the construction sector to be $954.8 billion in 2003. (See Table 2.1.)

Construction Employment

The construction sector employs approximately 5.2% of the American workforce, according to Industry at a Glance, an online profile of American business maintained by the BLS. In 2003, 6,722,000 workers were employed by construction businesses. Preliminary figures for 2004 indicated that construction employment had risen to an annual level of 6,965,000, which would be the best year for construction employment since 2001


Gross output by industry in current dollars, 2000–2003
[Billions of dollars]
1Consists of agriculture, forestry, fishing, and hunting; mining; construction; and manufacturing.
2Consists of utilities; wholesale trade; retail trade; transportation and warehousing; information; finance, insurance, real estate, rental, and leasing; professional and business services; educational services, health care, and social assistance; arts, entertainment, recreation, accommodation, and food services; and other services, except government.
source: "Table 8. Gross Output by Industry in Current Dollars, 2000–03," in Annual Industry Accounts: Revised Estimates for 2001–2003 by George M. Smith, Matthew J. Gruenberg, Tameka R. L. Harris, and Erich H. Strassner, Bureau of Economic Analysis, January 2005, (accessed February 24, 2004)
1All industries18,186.518,403.218,811.119,732.8
2Private industries16,287.716,384.116,655.417,427.8
3Agriculture, forestry, fishing, and hunting254.3258.7249.6275.1
5Forestry, fishing, and related activities50.747.947.751.3
7Oil and gas extraction137.6132.2111.5156.0
8Mining, except oil and gas47.648.949.449.0
9Support activities for mining30.743.332.838.7
13Durable goods2,328.22,128.82,084.92,090.3
14Wood products94.186.987.892.4
15Nonmetallic mineral products95.993.387.386.1
16Primary metals155.0135.9134.2128.2
17Fabricated metal products263.9248.5246.7240.4
19Computer and electronic products500.8418.8385.2408.7
20Electrical equipment, appliances, and components121.7109.999.897.6
21Motor vehicles, bodies and trailers, and parts466.8420.2436.0423.7
22Other transportation equipment156.8173.9170.0170.1
23Furniture and related products74.070.668.668.0
24Miscellaneous manufacturing117.6117.4123.4131.5
25Nondurable goods1,816.31,767.71,747.21,824.9
26Food and beverage and tobacco products557.1571.3571.8573.8
27Textile mills and textile product mills84.576.275.74.1
28Apparel and leather and allied products66.456.558.158.3
29Paper products162.4153.6149.9156.9
30Printing and related support activities103.4100.197.794.4
31Petroleum and coal products230.4217.5205.9239.6
32Chemical products437.6425.0412.3445.9
33Plastics and rubber products174.6167.5175.7181.8
34Wholesale trade867.2851.3871.7909.7
35Retail trade1,011.11,021.01,091.41,132.7
36Transportation and warehousing592.9571.4572.1592.5
37Air transportation121.9106.0101.1116.8
38Rail transportation42.743.944.546.1
39Water transportation28.928.828.130.4
40Truck transportation213.2205.7204.1196.8
41Transit and ground passenger transportation25.325.325.526.4
42Pipeline transportation26.827.731.731.2
43Other transportation and support activities101.7100.299.0101.7
44Warehousing and storage32.733.938.143
46Publishing industries (includes software)242.2242.8240.4244.4
47Motion picture and sound recording industries77.078.481.385.6
48Broadcasting and telecommunications554.9587.8586.7609.1
49Information and data processing services85.291.697.598.5
50Finance, insurance, real estate, rental, and leasing3,070.13,137.13,245.63,438.7
51Finance and insurance1,389.11,361.71,356.01,437.0
52Federal Reserve banks, credit intermediation, and related activities533.8555.6584.9612.0
53Securities, commodity contracts, and investments341.1284.7242.6248.5
54Insurance carriers and related activities428.0441.5456.4495.7
55Funds, trusts, and other financial vehicles86.179.872.280.8
56Real estate and rental and leasing1,681.01,775.41,889.62,001.6
57Real estate1,475.81,570.41,693.21,803.9
58Rental and leasing services and lessors of intangible assets205.2205.0196.4197.8
59Professional and business services1,813.51,877.01,917.62,007.1
60Professional, scientific, and technical services1,036.51,105.61,129.91,192.1
61Legal services181.4193.4202.7220.3
62Computer systems design and related services172.6173.3161.6167.5
63Miscellaneous professional, scientific, and technical services682.4738.9765.6804.3
64Management of companies and enterprises300.6290.4291.5304.6
65Administrative and waste management services476.4481.0496.2510.4
66Administrative and support services425.6429.7444.3455.3
67Waste management and remediation services50.851.352.055.1
68Educational services, health care, and social assistance1,109.91,201.91,296.41,372.8
69Educational services140.5150.5157.4163.0
70Health care and social assistance969.41,051.31,139.01,209.8
71Ambulatory health care services451.2488.3526.7562.2
72Hospitals and nursing and residential care facilities430.0464.1506.7535.9
73Social assistance88.398.9105.6111.7
74Arts, entertainment, recreation, accommodation, and food services640.0655.1682.7719.6
75Arts, entertainment, and recreation147.1154.1163.6170.5
76Performing arts, spectator sports, museums, and related activities65.970.675.978.5
77Amusements, gambling, and recreation industries81.283.687.792.0
78Accommodation and food services492.9500.9519.1549.1
80Food services and drinking places355.3370.2386.8414.0
81Other services, except government428.3445.9457.9472.2
84General government509.2541.0601.8667.4
85Government enterprises82.982.882.787.9
86State and local1,306.81,395.41,471.21,549.6
87General government1,153.21,229.11,301.81,371.2
88Government enterprises153.6166.3169.4178.4
89Private goods-producing industries15,476.15,279.45,184.35,388.8
90Private services-producing industries210,811.611,104.711,471.112,039.0

(6,826,000). However, according to the BLS, the unemployment rate for construction workers was 9.3% in 2003, higher than the overall unemployment rate of 6% that year. The BLS also estimated in Career Guide to Industries: 2004–05 Edition that approximately 1.6 million construction industry workers were self-employed in 2002, including more than 40% of painters, paperhangers, and flooring installers.

Construction employment often fluctuates throughout the year, especially in areas of the country that experience severe winter weather. The American Road & Transportation Builders Association (ARTBA), an industry advocacy group based in Washington, D.C., estimated in Transportation Construction Industry Employment (February 2005) that construction industry employment totaled 6,985,000 in December 2004. The ARTBA broke out the total by sub-sector, including 923,400 employees in residential building, 751,600 in nonresidential building, 319,000 in highway, street and bridge building, 367,300 in utility system construction, 86,100 in land subdivision, 95,000 in other heavy construction, 1,002,100 in building foundation and exteriors, 1,887,900 in building equipment, 926,900 in building finishing, and 625,700 in other specialty trades. The largest groups, building equipment contractors (27%), building foundation and exterior contractors (13.7%), building finishing contractors (13.3%), and residential building (13.2%) accounted for more than two-thirds of U.S. construction employment in December 2004.

Home Building

One subsector of the construction industry is the home building and remodeling industry. According to the National Association of Home Builders (NAHB), the construction and remodeling of housing in the United States accounts annually for about 15% of the gross domestic product (GDP), the nation's total economic activity. In 2003 the number of new homes sold exceeded one million for the first time in history, according to the U.S. Census Bureau. The NAHB, in Housing 2004: Facts, Figures & Trends, estimated that for each one thousand single-family homes built in the United States, 2,448 construction jobs are generated, and approximately $79.4 million in wages are paid. The NAHB further noted that the economic impact of housing on the national economy includes purchases made by homeowners during the first year of homeownership, including an average $8,905 spent on such items as furnishings, appliances, and property alterations.

Road and Transportation Construction

Another subsector of the construction industry builds roads, railroads, seaports, and airports. According to the ARTBA, construction contracts awarded in 2004 totaled more than $45.7 billion dollars. This sum, which resulted from 29,676 separate contracts, was more than $1 billion below the 2003 total. In 2004, according to ARTBA's U.S. Transportation Construction Market Report, highway construction totaled $31.5 billion on 23,432 projects; bridge and tunnel contracts totaled $10 billion; airport construction contracts amounted to $1.7 billion; railroad construction accounted for $2 billion; and construction projects on docks, piers, and wharves totaled about $550 million.

Annual employment numbers in the transportation and road construction industry were up in 2004 after a downturn in 2003. According to Transportation Construction Industry Employment Annual Report—2004, prepared by ARTBA and available online (, the monthly average for highway, street, and bridge employment in 2004 was nearly 347,700. This represented a 2.2% increase over the 2003 average (340,100) and a 20.5% increase since 1990 (288,500). The average highway, street, and bridge worker spent 41.5 hours on the job each week during 2004 and earned a weekly paycheck of approximately $801.


The education and health services supersector includes all instructional and training facilities, including private schools and universities, that are not funded by the government. Nongovernmental organizations that provide child day care, medical care, and social assistance are also included. Businesses of this type that are government owned (public schools and hospitals, for example) are considered part of the government sector (see below).

The BLS in Quarterly Census of Employment and Wages estimated that in 2003 there were 13,721,850 workers employed in private health care and social assistance and 2,016,163 workers in private education. Non-supervisory workers in this sector averaged 32.3 hours on the job in 2003, compared to the national average of 33.7 hours for production and nonsupervisory personnel according to Industry at a Glance. At 3.6%, the unemployment rate for workers in this sector was lower than the national average of 6% in 2003.

Education, NAICS 61

According to the Council for American Private Education (CAPE), there were approximately 29,000 private schools in the United States in 2005, with more than six million students. In Private Schools: A Brief Portrait, Findings from the Condition of Education 2002, the National Center for Education Statistics (NCES) estimated that private schools constituted about 24% of all schools and maintained approximately 10% of national school enrollment. The NCES reported that 79% of private schools had a religious affiliation, with 30% Roman Catholic, 49% other, and the remainder nonsectarian. Private Schools found that on average, private schools had smaller class sizes and lower student/teacher ratios than public schools.

Health Care and Social Assistance, NAICS 62

According to the American Hospital Association in "Fast Facts on U.S. Hospitals from AHA Hospital Statistics" (, of the 5,764 U.S. hospitals counted in the survey, 4,895 were community hospitals, that is, hospitals accessible to the general public and intended for short-term care. Academic teaching hospitals are included in this number if they are nonfederal, short-term facilities, but psychiatric hospitals, long-term care facilities, and prison hospitals, for example, are not. In 2003 there were 2,984 nongovernment, nonprofit community hospitals and 790 investor-owned, for-profit community hospitals in the United States.

In 2003 Service Annual Survey (2004), the U.S. Census Bureau estimated that revenue for employer firms in the health care and social assistance sector reached $1.3 trillion in 2003. Of this number, physicians' offices brought in $256.4 billion, nursing and residential care facilities earned $126.8 billion, dentists reached $70.8 billion, medical and diagnostic laboratories totaled $29.1 billion, and child day care services earned $23 billion in 2003.


The financial activities supersector comprises the banking, insurance, and real estate industries, including businesses that, according to Industry at a Glance, facilitate "transactions involving the creation, liquidation, or change in ownership of financial assets." The real estate sector includes businesses that manage properties for others, appraise real estate, and facilitate property buying, selling, and leasing.

According to the 2003 Service Annual Survey, employer firms engaged in securities, commodity contracts, and other financial investment activities earned an estimated $273.8 billion in 2003. Of this number, investment banking and securities dealing accounted for $86.4 billion, portfolio management totaled $82 billion, and investment advice firms earned $18.7 billion.

The financial activities supersector accounted for approximately 6% of all employment and 5.5% of all business establishments, according to the 2003 data from Industry at a Glance. According to the BLS, nonsupervisory workers in financial activities worked an average 35.5 hours per week in 2003 and earned an average $17.13 per hour. Unemployment among workers in this sector, at 3.5%, was lower than the national average of 6% for the year.


The government sector encompasses all local, state, and federal government agencies as well as public schools and public hospitals. This includes law enforcement agencies, courts, and legislative assemblies, but, for the purposes of industry tracking, does not include military personnel.

According to the BLS in Industry at a Glance, the government sector employed approximately 21,575,000 people in 2003, representing about 16.2% of all U.S. employment. BLS data in Quarterly Census of Employment and Wages indicated that the federal government made up 2.2% of national employment, state governments comprised 3.5%, and local government entities and publicly funded organizations employed 10.5%. The unemployment rate for workers in the public sector was 2.8%, significantly lower than the 6% national average for 2003, and the lowest of any sector. Of the 1.9 million civilian employees of the federal government in 2002, approximately 3% worked outside the United States in diplomatic and military installations.

Federal Government

In Career Guide to Industries: 2004–05 Edition, the BLS reported that in 2002, 60% of civilian federal employees worked in managerial, business, financial, or professional positions, a rate double that of the American workforce overall. In 2002 the legislative branch employed 1% of federal government workers, including members of the House of Representatives, the Senate, their aides, and clerical employees. The judicial branch, including the Supreme Court, as well as Courts of Appeal and District Courts, employed another 1% of federal employees. Ninety-eight percent of federal government workers were employed in the more than one hundred agencies and departments of the executive branch. Fifteen departments in the executive branch are headed by Cabinet-level secretaries who report directly to the president. These departments are:

commerce. With 39,000 workers and a $9.4 billion budget for fiscal year 2006, the Commerce Department includes the Bureau of the Census, the Bureau of Economic Analysis, the Bureau of Industry and Security, the International Trade Administration, the Minority Business Development Agency, the National Ocean & Atmospheric Agency, the National Technical Information Service, the Patent and Trademark Office, and the Technology Administration.

defense. In addition to more than 2.5 million active and reserve military personnel, the Defense Department included 700,000 civilian employees in its $401.7 billion budget for fiscal year 2005. It is the largest of the Cabinet-level departments of the U.S. government. Civilian employees in the Defense Department perform professional, medical, technical, clerical, and support activities for the military.

education. The Department of Education plans to employ 4,500 workers under a budget of $69.4 billion during fiscal year 2006. Through such programs and initiatives as Federal Student Aid and the No Child Left Behind Act, the department distributes financial aid, supports innovation and improvement in education, and works to ensure equal access to education in the United States.

energy. The 100,000 federal and contractor employees in the Energy Department operated under a $23.4 billion budget during fiscal year 2006. Branches of the department include the Energy Information Administration, the National Nuclear Security Administration, the National Laboratories & Technology Centers, and Power Marketing Administrations.

health and human services. Comprising the Administration for Children and Families, the Centers for Disease Control and Prevention, the Centers for Medicare & Medicaid Services, the Food and Drug Administration, the Indian Health Service, and the National Institutes of Health, the Department of Health and Human Services included 67,284 employees in its $66 billion budget for fiscal year 2006.

homeland security. The Department of Homeland Security employed a workforce of 181,672, including 47,112 members of the Coast Guard, in 2005. Its budget for fiscal year 2006 was $41.1 billion, and, in addition to the Coast Guard, the department includes such agencies and administrations as Citizenship & Immigration Services, Customs & Border Protection, the Domestic Nuclear Detection Office, the Federal Emergency Management Agency, the Secret Service, and the Transportation Security Administration.

housing and urban development. With 9,000 employees and a $30.4 billion budget for fiscal year 2006, the Department of Housing and Urban Development promotes and facilitates home ownership through initiatives focused on community planning, fair housing, equal opportunity, and public housing. It also supports the mortgage industry through the Government National Mortgage Association (Ginnie Mae).

interior. Created by Congress in 1849, the Department of the Interior maintained a workforce of 70,600 employees under a $15 billion budget during fiscal year 2006. Operations of the department are conducted through the Bureau of Indian Affairs, Bureau of Reclamation, Bureau of Land Management, Minerals Management Service, National Park Service, U.S. Fish and Wildlife Service, U.S. Geological Survey, and Office of Surface Mining.

justice. With 103,158 employees (actual, September 2004) and a fiscal year 2005 budget of $22.2 billion, the Department of Justice includes the Attorney General's office, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Bureau of Justice Statistics, the Drug Enforcement Administration, the Federal Bureau of Investigation, and the Federal Bureau of Prisons.

labor. The Department of Labor plans to house 16,945 employees under a $54.5 billion budget for fiscal year 2006. Its operating entities include the Bureau of Labor Statistics, the Employee Benefits Security Administration, the Employment & Training Administration, the Bureau of International Labor Affairs, the Mine Safety and Health Administration, and the Occupational Safety & Health Administration.

state. The State Department will operate with a $9.3 billion budget during fiscal year 2006, but it was part of more than $33.6 billion budgeted for international affairs, including foreign aid, famine relief, and counter-narcotics funding. The State department workforce included 9,000 Foreign Service personnel in 170 countries during 2005.

transportation. With 58,610 employees and a $58.8 billion budget during fiscal year 2005, the Transportation Department includes the Federal Aviation Administration, Federal Highway Administration, Federal Motor Carrier Safety Administration, Federal Railroad Administration, Federal Transit Administration, Maritime Administration, and the National Highway Traffic Safety Administration.

treasury. The Treasury Department, which includes the Bureau of Engraving & Printing, the Financial Crimes Enforcement Network, the Internal Revenue Service, and the U.S. Mint, will operate with 103,000 employees and an $11.6 billion budget during fiscal year 2006.

veterans affairs. The Veterans Affairs Department is the second largest of the fifteen Cabinet-level departments in the U.S. government and includes 120 national cemeteries maintained by the National Cemetery Administration, 158 medical centers comprising the Veterans Health Administration, and fifty-eight regional offices of the Veterans Benefits Administration. Its budget for fiscal year 2006 was $70.8 billion, and it employed 230,000 people in 2005.

State Governments

The U.S. Census Bureau estimated in State Government Employment and Payroll: March 2003 that 5,042,800 people were employed either full-time or part-time by state governments in March 2003. The largest numbers were employed in higher education, corrections, and hospitals.

Local Governments

According to Compendium of Public Employment: 2002 (U.S. Census Bureau, September 2004), there were about 87,500 local governments in the United States in 2002. Of these, approximately 36,000 government entities were below the county level. These were mainly cities, towns, townships, municipal corporations, and other local governing districts. About 13,500 school districts in the United States also counted as independent units of government, according to the study, meaning that they were directly funded by tax revenue and not operating as dependent agencies of the local government.

Public schools covering prekindergarten through high school enrolled an estimated forty-eight million students in 2003, according to the U.S. Department of Education, National Center for Education Statistics in Condition of Education 2004. When college students were included, enrollment in public education in the United States topped 70.7 million in fall 2003. About nine million people were employed in public schools, colleges, and universities in 2003, including 4.2 million teachers and faculty and 4.8 million professional, administrative, and support staff.

In May 2004 the U.S. Department of Justice, Bureau of Justice Statistics released Justice Expenditure and Employment in the United States, 2001, a study by Lynn Bauer and Steven D. Owens. In the report, Bauer and Owens estimate that "seven cents of every dollar spent by state and local governments in 2001 was for justice activities." This included three cents for police protection, nearly three cents for corrections, and two cents for judicial and legal services. Total justice system spending in 2001 by state governments amounted to $63.4 billion; local governments spent $83.4 billion. The BLS estimated in Occupational Outlook Handbook: 2004–05 Edition that 840,000 law enforcement officers and detectives were employed by all governmental levels in 2002. Local governments employed approximately 81% of police officers in the United States.


The production and distribution of information falls under the information supersector of the American economy. This sector includes book and software publishing, Internet service providers, and television broadcasting, as well as the motion picture and sound recording industries. Although the information sector is relatively small, representing only about 2.6% of employment and 1.9% of business establishments, with the expansion of media outlets and Web publishing in the late twentieth century, this sector increased in its impact and importance in the economy both nationally and globally.

According to the 2003 Annual Survey, employer firms in the information industry brought in $889.3 billion in 2003. Newspaper, periodical, book, database, and greeting card publishers earned a combined $142.5 billion, while software publishers earned $89.9 billion. The motion picture and video industries totaled $64 billion in 2003, and the sound recording industry, including music publishing, recording, and distribution, amounted to $13.8 billion. The 2003 Service Annual Survey also reported that radio and television broadcasting combined to bring in $51.9 billion in 2003, while cable networks and program distribution earned an additional $90.5 billion. The telecommunications sector, including cellular service, paging, and other wired and wireless communications, totaled $348 billion in 2003, according to the Census Bureau survey. Information services such as news syndicates, online information services, and data processing, combined to bring in $88.6 billion in 2003.

According to the BLS in Industry at a Glance, employment in the information supersector averaged 3,198,000 in 2003, which showed growth from 2,738,000 in 1994 but was somewhat lower than the peak employment of 3,631,000 in 2000. Nonsupervisory employees in the information sector worked an average 36.2 hours per week, which was above the national average of 33.7 for workers in the private sector overall. Unemployment in this sector, at 6.8%, was slightly higher than the national average of 6% in 2003. Wages of nonsupervisory employees in the information sector, at more than $21 per hour in 2004, were above the national average of $15.35 for production workers, and had risen 34% from the 1994 level of $15.68.


The leisure and hospitality supersector includes businesses in the arts, entertainment, recreation, spectator sports, accommodation, and food service industries. This includes performance venues, gambling outlets, golf courses, amusement parks, arcades, hotels and other lodging sites, food service establishments, and privately funded exhibit spaces and historic sites. According to the Bureau of Economic Statistics in Annual Industry Accounts, the arts, entertainment, recreation, accommodation, and food services sector generated gross output of $719.6 billion in 2003. (See Table 2.1.)

The Current Employment Survey of the BLS indicated 12,125,000 people were employed in the leisure and hospitality sector in 2003, an all-time high for the sector. This represented about 9.4% of all workers in the United States. Nonsupervisory employees in the leisure and hospitality supersector averaged 25.6 hours on the job in 2003 and earned an average $8.76 per hour; both of these figures were significantly below national averages for nonsupervisory employees overall, including an average 33.7 hours on the job and an average hourly rate of $15.35. In addition, workers in this sector suffered higher than average unemployment at 8.7% versus the national average of 6% during 2003.


An organization is considered part of the manufacturing sector if its primary business is to transform raw materials into new products through mechanical, physical, or chemical processes. Manufacturing covers many separate industries, including aerospace, apparel, computers, automobiles, pharmaceuticals, printing, steel, and textiles, among others, and provides products that contribute and support all other economic sectors. According to Manufacturing in America (Washington, D.C.: U.S. Department of Commerce, January 2004), the manufacturing sector accounts for 14% of the GDP and provides employment to 11% of American workers. In 2004 the manufacturing industry produced three-fourths of all exports from the United States. Figure 2.1 shows the contribution of manufacturing to the growth of U.S. private-sector output since 1987. (The term "total real private output" in Figure 2.1 signifies the output of private industry, which is figured as the GDP minus the government sector). According to the National Association of Manufacturers in "Keeping America Competitive: How a Talent Shortage Threatens U.S. Manufacturing" (2003), "Every $1 million in manufacturing sales supports eight jobs in manufacturing and six in other, allied sectors."

According to the Department of Commerce in Manufacturing in America, employment in manufacturing has declined significantly since the late 1970s, when manufacturing employment accounted for 22% of nonfarm jobs. The report explained that many of the lost jobs resulted from productivity gains in manufacturing that "outstripped the growth in demand for manufactured goods." A view of the decline in manufacturing employment since 1994 is shown in Figure 2.2. During the late 1990s the annual average for manufacturing employment was about seventeen million workers, a number that dropped sharply to 14,525,000 by 2003, according to the BLS in Current Employment Statistics. In 2002 alone, 469,774 manufacturing workers filed new claims for unemployment insurance, and the outlook for manufacturing employment was not optimistic. A further 1% reduction of the manufacturing workforce is expected by the BLS during the period between 2002 and 2012. This downward trend runs counter to a projected increase over all in U.S. employment of more than 14%.

During 2003, however, the average hourly earnings of production workers in manufacturing were slightly higher ($15.74) than the average for other nonsupervisory production workers in private industry, whose average wages in 2003 were $15.35 per hour. (See Figure 2.3.) In addition, according to Manufacturing in America, workers in the manufacturing sector enjoyed higher benefits compensation ($8.89 per hour) compared with nonmanufacturing employees ($5.94).

Manufacturing Technology

Technological innovation has long been a hallmark of the U.S. manufacturing sector and continues to affect productivity and efficiency. The U.S. Department of Commerce


reported in Manufacturing in America that American manufacturing's contribution to the economy is greatly responsible for the high standard of living enjoyed by most Americans compared with other countries. The report further explained that U.S. manufacturers lead the world in innovation and technology. More than 90% of all U.S. patents registered each year are from the manufacturing sector, indicating its emphasis on creating and profiting from new technology. By investing in technological advances, manufacturing firms are ensuring more jobs and launching new industries as they bring products and technologies to market.


The natural resources and mining supersector includes all agriculture, forestry, fishing, hunting, and mining enterprises. Farms engaged in growing crops and raising animals are included in this sector, as are lumber and fishing operations, coal mining, petroleum and natural gas extraction, and other mining and quarrying activities.

Agriculture, Forestry, Fishing, and Hunting, NAICS 11

In addition to farms, businesses in this sector include ranches, dairies, greenhouses, nurseries, orchards, hatcheries, and logging companies. Forestry, fishing, and hunting


businesses are differentiated from agricultural enterprises in that they harvest products directly from their natural environments. Workers in the forestry sector are engaged in numerous occupations in addition to cutting trees to produce lumber. For example, conservation workers collect data on forests, plant seedlings, remove diseased trees, apply insecticides to existing trees, and manage forests to maintain animal habitats and to ensure compliance with federal regulations regarding the industry.

In Career Guide to Industries: 2004–05 Edition, the Bureau of Labor Statistics reported that while small, family farms made up more than 90% of all farm businesses in the United States, large, commercial farms (those with more than $250,000 in annual sales) accounted for more than half of U.S. agricultural production. The agriculture subsector is divided into two segments: those that produce crops and those that produce livestock, including beef, hogs, and poultry. More than half of farmers are self-employed. Survey results from a 2002 Census of Agriculture: United States Data from the National Agriculture Statistics Service shows that the number of farms, amount of acreage, and harvested land decreased between 1997 and 2002.

According to the BLS in Career Guide to Industries: 2004–05 Edition, more than 2.2 million people were employed in the agriculture sector during 2002. However, the BLS also reported that agriculture was one of the lowestpaying professions in the United States, with wages ranging from $9.40 an hour for laborers to $28.78 an hour for supervisory or management positions in 2003. In addition, the workforce unemployment rate, at 10.2% in the agriculture sector during 2003, was 70% higher than the national average of 6%.

Mining, NAICS 21

The mining industry is composed of subsectors that produce coal, ores, liquid minerals (e.g., petroleum),


gases, and minerals. The Bureau of Economic Analysis in its Annual Industry Accounts (January 2005) reported that the combined mining sector realized a gross total output of $243.7 billion in 2003. About 1.8 million workers were engaged in the mining industry in June 2004, according to the BLS in Quarterly Census of Employment and Wages.

The National Mining Association (NMA), an industry advocacy group based in Washington, D.C., estimated on its Web site ( that the total value of coal production in 2003 was about $19 billion. More than one billion tons of coal are produced each year in the United States. In 2002 the wage and salary workforce numbered 74,000 in the coal mining industry.

Nonfuel mineral production in the United States topped $44 billion in 2004, according to the U.S. Geological Survey in Mineral Commodity Survey 2005. The top four mineral-producing states accounted for more than one-quarter of total national output. With 8.23% of national production, California was the leading state in production value in 2004, producing $3.6 billion in sand, gravel, cement, boron minerals, crushed stone, and diatomite. Nevada, which chiefly produced gold, sand, gravel, lime, silver, and crushed stone, was second with 7.4% of national production and a value of roughly $3.3 billion. Arizona was third at 6.83% ($3 billion), and Texas was fourth at 5.47% ($2.4 billion), according to Mineral Commodity Summary 2005. Figure 2.4 shows the role of nonfuel minerals in the U.S. economy. During 2002, according to the BLS in Career Guide to Industries: 2004–05 Edition, there were 29,000 wage and salary workers in metal mining and 107,000 in nonmetallic mineral mining.

The BEA in its Annual Industry Accounts (January 2005) reported that the oil and gas extraction sector had a


gross output totaling $156 billion in 2003. Career Guide to Industries: 2004–05 Edition reported that gas extraction, the largest sector in the mining industry, employed 123,000 workers in 2002. More than three-quarters of these employees worked in California, Louisiana, Oklahoma, and Texas.


The service industry combines two of the supersectors identified above: Professional and Business Services (NAICS 54–56) and Other Services (NAICS 81). The service industry includes businesses whose main function is to provide a professional or trade service rather than a product. Professional and business services include legal, accounting, architectural, engineering, advertising, marketing, translation, and veterinary services. This sector also comprises those who manage companies and all of the administrative support needed for a business to operate. In addition, security, surveillance, cleaning, and waste disposal services are also tracked in this sector. The second branch of the service industry, Other Services, includes such jobs as repairing equipment and machinery, administering religious activities, operating dry cleaning services, conducting personal care, death care, and pet care services, and supplying photo processing services. In 2004 the professional and business services supersector accounted for about 16% of all U.S. businesses, while other services made up 12.6% of business establishments, according to the BLS in Industry at a Glance. Representing approximately two-thirds of GDP, the services sector grew 2% in 2002 and 3.2% in 2003, according to a press release issued December 20, 2004, by the Bureau of Economic Analysis.

Revenue of Service Industries

Table 2.2 shows estimated revenue for taxable employer firms in different industries within the professional and business services sector between 1998 and 2003. In 2003 this sector generated $864.5 billion in revenue, with legal services accounting for $187.5 billion, accounting, tax preparation, bookkeeping, and payroll services earning $80.6 billion, architecture, engineering, and related services totaling $168.8 billion, and advertising and related services bringing in $66.7 billion.

Taxable firms offering administrative, support, and waste management services generated an additional $436.8 billion in 2003, according to the 2003 Service Annual Survey of the U.S. Census Bureau. This included $116 billion for employment services, including placement and temporary help services; $53.2 billion for such business support services as document preparation, telephone answering services, and telemarketing; $27.5 billion for travel arrangement and reservation services; $30.3 billion for investigation and security services; and almost $50 billion for services to buildings and dwellings, including exterminating, pest control, janitorial, and carpet cleaning services.

Table 2.3 lists estimated revenue for taxable employer firms in the other services sector between 1998 and 2003. In this sector automotive repair and maintenance businesses generated $80 billion in revenue in 2003. During that same year, businesses that repair and maintain electronic and precision equipment earned $17.8 billion; personal and household goods repair services, including furniture reupholstery and shoe repair shops, totaled $13 billion; hair, nail, and skin care businesses brought in $15.7 billion; death care businesses had revenues of $15 billion; and dry-cleaning and laundry services totaled $20.5 billion.

Employment and Wages

According to Industry at a Glance, the combined service sectors made up approximately 15.7% of the workforce in 2003, with professional, scientific, and technical services accounting for about 5.2%, management of companies about 1.3%, administrative, support, and waste management services about 5.9%, and other services about 3.3%. Jobs within the professional and business services sector hit their highest levels in 2000, declined slightly, and then leveled off in 2003, according to the Bureau of Labor Statistics. (See Figure 2.5.) Industry at a Glance reported that professional and business services averaged 15,997,000 employees in 2003, down from a peak of 16,666,000 in 2000; other services counted 5,393,000, employees in 2003, which the BLS identified as "an all-time high."

The increasing strength of the service sector within the American economy in terms of revenue was reflected in the wages earned by workers. The wages for those in nonsupervisory roles within professional and business services averaged $17.20 per hour in 2003, higher than the $15.35 national average for nonsupervisory production workers in private industry. However, when the national unemployment rate reached 6% in 2002, the unemployment rate for professional and business services workers had climbed to 8.2%. By October 2004, when the national unemployment rate had dropped to 5.5%, professional service workers still experienced a somewhat higher unemployment rate of 6.3%.


The transportation and utilities supersector comprises businesses that transport passengers or cargo by air, rail, water, road, or pipeline. The sector also includes businesses that provide storage of goods and that support transportation activities. Also tracked in this sector are private enterprises that generate, transmit, or distribute such utilities as electric power, natural gas, and water.


Professional, scientific, and technical services—Estimated revenue for taxable employer firms, 1998–2003
[Estimates are based on data from the 2003 Service Annual Survey and administrative data. Estimates for 2002 and prior years have been revised to reflect historical corrections to individual responses. Dollar volume estimates are published in millions of dollars; consequently results may not be additive. Except where indicated, estimates have been adjusted using results of the 1997 Economic Census]
NAICS codeKind of business200320022001200019991998
1Estimates for NAICS 541191 (title abstract and settlement offices), not shown separately, have not been adjusted using the results of the 1997 Economic Census.
2Estimates have not been adjusted using the results of the 1997 Economic Census.
3Includes NAICS 54134 (drafting services), NAICS 54135 (building inspection services), NAICS 54136 (geophysical surveying and mapping services), and NAICS 54137 (surveying and mapping (except geophysical) services).
4Includes NAICS 54142 (industrial design services), NAICS 54143 (graphic design services), and NAICS 54149 (other specialized design services).
5Includes NAICS 54183 (media buying agencies), NAICS 54184 (media representatives), NAICS 54187 (advertising material distribution services), and NAICS 54189 (other services related to advertising).
Note: Estimates cover taxable firms and are not adjusted for price changes. The introduction and appendixes give information on confidentiality.
source: "Table 6.1. Professional, Scientific, and Technical Services (except Notaries and Landscape Architectural Services) (NAICS 54)–Estimated Revenue for Taxable Employer Firms 1998 through 2003," in Service Annual Survey, (accessed February 20, 2005)
54Professional, scientific, and technical services (except notaries and landscape architectural services)864,537833,575827,164793,828717,935651,998
5411Legal services (except notaries)187,507169,257161,340151,082144,912136,228
54111Offices of lawyers178,950162,742155,263145,617139,330130,749
54119Other legal services18,5576,5156,0775,4655,5815,479
5412Accounting, tax preparation, bookkeeping, and payroll services80,64078,42477,96073,56166,78261,864
541211Offices of certified public accountants52,76253,49354,74750,48746,48643,632
541213Tax preparation services4,2333,9113,5673,1712,9122,579
541214Payroll services213,24911,64610,95611,63310,2388,954
541219Other accounting services10,3979,3748,6908,2707,1486,700
5413Architectural, engineering, and related services (except landscape architectural services)168,828166,114165,179157,404140,287131,220
54131Architectural services26,68525,08426,55424,86722,20720,691
54133Engineering services123,610122,956121,852117,740104,09396,390
54138Testing laboratories9,1669,0858,1477,3837,1787,274
5413xOther related services39,3678,9898,6277,4146,8096,866
5414Specialized design services18,27417,31118,13318,27616,47815,512
54141Interior design services6,5196,1035,9975,9115,4525,232
5414xAll other design services411,75511,20812,13512,36411,02710,280
5415Computer systems design and related services168,792171,111180,873184,415162,811137,312
541511Custom computer programming services55,73157,63462,86067,10360,10049,140
541512Computer systems design services285,01986,50289,20991,39179,90470,639
541513Computer facilities management services216,58916,41318,73816,07114,92511,768
541519Other computer related services11,45410,56210,0669,8507,8825,765
5416Management, scientific, and technical consulting services108,223104,02298,07988,54079,97372,902
54161Management consulting services88,93987,18282,49874,79767,90561,361
54162Environmental consulting services29,9488,7287,8227,0226,3325,776
54169Other scientific and technical consulting services9,3378,1137,7596,7215,7375,765
5417Scientific research and development services44,93742,91738,79633,22128,74325,508
54171Research and development in the physical, engineering, and life sciences42,89141,01637,09131,65727,30024,237
54172Research and development in the social sciences and humanities2,0461,9011,7041,5641,4431,271
5418Advertising and related services66,68964,53566,75368,26760,43655,404
54181Advertising agencies26,09424,58924,78025,14921,25318,634
54182Public relations agencies7,4667,3487,2907,6996,0615,419
54185Display advertising6,6426,2266,0816,4095,9605,320
54186Direct mail advertising10,11210,01310,1989,8309,4159,078
5418xAll other advertising516,37516,36018,40519,18117,74716,953
5419Other professional, scientific, and technical services (except veterinary services)20,64719,88420,05219,06217,51216,049
54191Marketing research and public opinion polling9,0198,8349,2579,4788,9367,878
54192Photographic services6,0915,8836,1256,0005,7835,822
541921Photography studios, portrait3,9893,8853,9033,7963,7823,849
541922Commercial photography2,1021,9982,2232,2042,0011,973
54193Translation and interpretation services672609590563521484
54199All other professional, scientific, and technical services4,8654,5584,0793,0212,2721,867

Transportation and Warehousing, NAICS 48–49

air transportation. Air transportation includes both passenger airlines and air cargo companies. According to the BEA in Annual Industry Accounts, the air transportation industry generated gross output of $116.8 billion in business during 2003. (See Table 2.1.) The Air Transport Association of America, an industry advocacy group formed in 1936, reported in The Airline Handbook ( that 75% of air transportation revenue comes from passengers, 15% is derived from cargo fees, and 10% is drawn from other sources. The Bureau of Transportation Statistics reported online ( that in 2003, 646,523 passengers boarded U.S. planes. Approximately 559,000 people held wage and salaried positions within the air transportation sector in 2003, according to Career Guide to Industries: 2004–05 Edition.


Other services (NAICS 81)—Estimated revenue for employer firms, 1998–2003
[Estimates are based on data from the 2003 Service Annual Survey and administrative data. Estimates for 2002 and prior years have been revised to reflect historical corrections to individual responses. Dollar volume estimates are published in millions of dollars; consequently results may not be additive. Except where indicated, estimates have been adjusted using results of the 1997 Economic Census]
NAICS codeKind of business200320022001200019991998
1Estimates have not been adjusted using the results of the 1997 Economic Census.
2Estimates for NAICS 813211 (grantmaking foundations), not shown separately, have not been adjusted using the results of the 1997 Economic Census.
Note: Estimates cover taxable (all NAICS 811 and 812 industries) and tax-exempt (all NAICS 813 industries) firms and are not adjusted for price changes.
source: "Table 10.1. Other Services (NAICS 81)—Estimated Revenue for Employer Firms: 1998 through 2003," in Service Annual Survey, (accessed February 20, 2005)
81Other services (except public administration, religious, labor, and political organizations, and private households)337,577325,504325,966322,475304,208288,348
811Repair and maintenance136,533131,537130,632125,210119,478114,753
8111Automotive repair and maintenance79,82776,40777,68074,29270,49267,335
81111Automotive mechanical and electrical repair and maintenance41,29939,22840,78138,69036,93335,767
811111General automotive repair33,84731,81333,11231,05129,12727,633
811112Automotive exhaust system repair1,9381,9471,9781,7821,8551,918
811113Automotive transmission repair2,4032,4162,5472,4922,4432,468
811118Other automotive mechanical and electrical repair and maintenance3,1123,0513,1433,3653,5073,748
81112Automotive body, paint, interior, and glass repair26,80725,84525,95425,39323,96922,789
811121Automotive body, paint, and interior repair and maintenance23,44022,35322,32221,93320,40419,320
811122Automotive glass replacement shops3,3673,4923,6323,4593,5653,470
81119Other automotive repair and maintenance11,72111,33410,94510,2099,5908,778
811191Automotive oil change and lubrication shops4,0013,8993,5973,3012,9882,938
811192Car washes6,4026,0775,9535,5405,2694,625
811198All other automotive repair and maintenance1,3171,3581,3951,3691,3331,216
8112Electronic and precision equipment repair and maintenance17,83618,00118,00817,57217,35516,247
811211Consumer electronics repair and maintenance1,5351,5641,5901,6211,4901,517
811212Computer and office machine repair and maintenance9,0579,62510,0229,94610,2319,593
811213Communication equipment repair and maintenance2,4432,4842,2672,1531,8711,710
811219Other electronic and precision equipment repair and maintenance14,8014,3274,1283,8523,7633,427
8113Commercial and industrial machinery and equipment (except electronic) repair and maintenance25,78724,23222,21720,75319,31519,381
8114Personal and household goods repair and maintenance13,08312,89812,72812,59412,31611,790
81141Home and garden equipment and appliance repair and maintenance5,8735,7655,4575,4135,4285,116
81142Reupholstery and furniture repair1,7241,7161,6621,6671,5751,445
81143Footwear and leather goods repair243251250256266260
81149Other personal and household goods repair and maintenance5,2435,1675,3605,2585,0474,969
812Personal and laundry services73,75872,58670,87668,79865,10361,893
8121Personal care services19,99619,12417,83817,15015,93615,322
81211Hair, nail, and skin care services15,67015,13314,46114,22513,17212,775
812111Barber shops503510477482470443
812112Beauty salons14,01113,70713,22513,10112,16811,822
812113Nail salons1,156916759642534510
81219Other personal care services4,3263,9913,3772,9252,7642,547
812191Diet and weight reducing centers2,0361,7981,4801,2711,3331,229
812199All other personal care services2,2912,1931,8971,6541,4311,318
8122Death care services14,94013,88713,79113,26813,33213,175
81221Funeral homes and funeral services12,19711,21611,04710,43410,44210,335
81222Cemeteries and crematories2,7432,6712,7452,8342,8902,841
8123Drycleaning and laundry services20,54821,49021,53620,97220,09018,929
81231Coin-operated laundries and drycleaners3,4853,7223,7263,6153,2362,931
81232Drycleaning and laundry services (except coin-operated)7,5648,0638,1228,1507,9197,521
81233Linen and uniform supply9,4999,7059,6889,2078,9358,478
812331Linen supply3,3873,4263,4753,3173,1143,006
812332Industrial launderers6,1126,2796,2145,8895,8215,472
8129Other personal services18,27418,08517,71117,40815,74614,467
81293Parking lots and garages8,1948,0407,9037,4366,7436,211
81299All other personal services4,6934,4064,3524,3943,3512,679
813Religious, grantmaking, civic, professional, and similar organizations (except religious, labor, and political organizations)127,286121,381124,457128,467119,627111,702
8132Grantmaking and giving services251,98051,00655,97863,05757,66752,213
8133Social advocacy organizations13,16611,66810,87110,4389,8828,877
8134Civic and social organizations14,17313,04312,52612,17511,40810,908
8139Business, professional, and other organizations (except labor and political organizations)47,96745,66445,08342,79840,67039,704

truck transportation and warehousing. The BLS estimated in Career Guide to Industries: 2004–05 Edition that the trucking industry included 28,000 local trucking establishments and 41,000 long-distance trucking companies in 2002. Another 45,000 trucking companies hauled specialized freight in 2002 that required


flatbeds, tankers, or refrigerated trailers. Household movers were included in the specialized freight sector. Warehousing establishments numbered approximately 13,000 in 2002 according to the BLS, including everything from industrial warehousing and refrigerated storage that held manufactured goods and food products to small self-storage units used by individuals.

About 4.2 million people were employed by transportation and warehousing businesses in 2003, according to the BLS in Current Employment Statistics. That comprised approximately 3.2% of total employment in the United States. Nonsupervisory workers in the transportation subsector worked an average 36.8 hours per week during 2003, exceeding the national average for production and nonsupervisory workers by more than three hours. The federal government limits truck drivers to no more than sixty hours of work within any seven-day period. Nonsupervisory workers in transportation tended to earn more than their counterparts in other industries, at $16.25 per hour compared to $15.35 for production and nonsupervisory workers overall. They were also more likely to remain employed, with an unemployment rate of 5.3% versus the national average of 6% in 2003.

Utilities, NAICS 22

The utilities sector includes private businesses engaged in the generation, transmission, and distribution of electricity, natural gas, and water, including sewage and water treatment plants that are not government-owned. According to the BLS in Career Guide to Industries 2004–05 Edition, "there were about 53,400 community water systems in the United States in 2002 serving almost 268 million people." Because of the fundamental nature of utilities and their importance to society, many utility companies in rural areas are owned by local governments, primarily because the high operating costs and low return make such small utilities unprofitable and therefore less likely to find private funding. In Current Employment Statistics the BLS estimated that utilities employment averaged 580,800 per month in 2003. Putting in an average 41.1 hours per week in 2003, nonsupervisory workers in the utilities sector worked 22% more than their counterparts in American industry overall, who worked an average of 33.7 hours per week. In addition, nonsupervisory utilities workers earned an average $24.76 per hour, which is 61% higher than the average $15.35 per hour earnings of U.S. production and nonsupervisory workers overall.


The wholesale and retail supersector encompasses private businesses that trade in products that they do not produce. Wholesalers buy large quantities of finished goods from manufacturers and sell the goods in smaller lots to businesses engaged in retail trade. Retailers then offer the goods for sale to consumers at an increased price, usually figured as a percentage of the wholesale cost. Goods in this sector are classified as durable (expected to last longer than three years) or nondurable (expected to need replacement within three years). Consumer goods in the durable sector include motor vehicles, furniture, household appliances, sporting goods, and toys. Durable goods are also sold to other businesses, for example, to the manufacturing or construction sector, including such items as machinery, equipment, metals, and construction materials. Examples of nondurable goods include paper products, drugs, apparel, groceries, books, flowers, and tobacco products. While the traditional notion of a retail establishment includes at least one store location, many retailers in the early twenty-first century operate via Internet and/or catalog sales without stores.

Wholesalers, NAICS 42

In Annual Industry Accounts the BEA reported that the gross output of the wholesale industry reached $909.7 billion in 2003. (See Table 2.1.) This figure was accomplished by 588,865 wholesale establishments, representing 7.2% of all businesses in the United States, according to the BLS in Quarterly Census of Employment and Wages ( In addition, the BLS reported that during 2003 the monthly average of workers in the wholesale trade was 5,605,600 and that nonsupervisory workers in this sector both worked more hours and earned a higher average wage than their counterparts in the nation overall. According to Current Employment Statistics nonsupervisory workers in the wholesale sector earned an average $17.36 per hour compared to the national average of $15.35 and worked an average 37.8 hours compared to 33.7. At 6% in 2003 the unemployment rate among wholesale workers was the same as the overall U.S. unemployment rate.

Retailers, NAICS 44–45

Retail sales, as tracked by the government includes sales of automobiles, clothing, food, electronics, construction materials, and other items. Retail trade realized gross output of $1.1 trillion in 2003, according to the BEA in Annual Industry Accounts. (See Table 2.1.) The 1,036,967 retail businesses made up 12.9% of the American economy during 2003, according to the BLS in Current Employment Statistics.

employment and wages. Retail workers tended to work fewer hours and earn a smaller hourly rate than the national average overall in 2003. According to the BLS, nonsupervisory workers in retail establishments averaged a 30.9-hour work week, and earned $11.90 per hour; production and nonsupervisory workers in the nation as a whole worked 33.7 hours per week on average at a rate of $15.35 per hour. However, the retail industry experienced wide disparity among sales subsectors, with clothing store sales positions realizing median hourly earnings of $7.77 per hour but salespeople in auto dealerships earning $18.25 per hour in 2002, according to the BLS in Occupational Outlook Handbook: 2004–05 Edition. Because many positions in the retail sales sector do not require postsecondary education or advanced training, this sector had a large number of young, inexperienced workers and part-time workers, who tend to be paid less than more educated, experienced workers. While the 6% unemployment rate among retail workers was the same as the national average, retail employment had dropped from 15,279,800 in 2000 to 14,911,500 in 2003.

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