Wall Street firms hired nearly 6,000 new workers in the second quarter, the first big increase since the 1987 stock market crash sent the industry into recession.
The Securities Industry Association said employment at New York Stock Exchange member firms rose to 214,925 at the end of June, a 2.8 percent increase for the year.Wall Street employment had fallen steadily since the stock market collapsed four years ago, bringing the roaring '80s to an end and triggering more than 50,000 job cuts.
But analysts and industry executives said the second-quarter increase was stimulated by robust performances in the stock trading and underwriting markets. They said it didn't signal the start of a hiring binge.
"We're not going to open the floodgates in any way, shape or form," said Patrick Walsh, director of human resources at Merrill Lynch & Co., the nation's biggest brokerage firm.
Merrill Lynch has hired 1,378 new brokers since Jan. 1, boosting its total U.S. broker staff to 10,570 at the end of August. The firm also is increasing its training program for new brokers by 25 percent to 1,500.
But statistics indicate that Wall Street is more selective about who it hires and in what departments, unlike the across-the-board additions that characterized the mid-1980s.
At No. 2 Shearson Lehman Brothers, the brokerage force has shrunk by 150 this year to 8,700. But spokeswoman Sally Cates said the losses reflect attrition, and the firm is actively hiring "high-quality" brokers.
The industry is having an extremely profitable year, earning $1.82 billion in the first six months. Stock trading activity is up and the underwriting of corporate stocks and bonds has soared from depressed 1990 levels.
But analysts said NYSE member firms - which lost $106 million last year, the first time the industry has been in the red since 1973 - only now have finished paying severance packages and other layoff-related expenses.
"I think it could be a mistake if the industry starts to build once again expecting that this is the ebb and that it's only going up from here," said John Keefe, an analyst with Lipper Analytical Service Corp.
NYSE trading activity skyrocketed to 193.6 million shares in the first quarter, but has settled back to a daily average of 182.6 million shares through Sept. 20.
Wall Street employment peaked at 262,173 at the end of September 1987. The March-June increase puts employment at levels not seen since early 1985.
Jeffrey Schaefer, research director at the SIA, the industry trade group that compiles the data, was at a loss to explain the gains.
"I'm surprised. I have not heard about people hiring in the industry in a big way," Schaefer said. "I don't know if it's an aberration or not."