News Trends - How the Start of the Recession was reviewed
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That's fairly good news for a change, especially after the Bureau of Labor Statistics (BLS) reported the terrible news that 182,000 (revised down from 223,000) workers lost their jobs in April. Although the BLS reported that the unemployment rate was little changed, it actually dropped a tenth. Still, at 4.4 percent, the May unemployment rate is among the highest it's been since October, 2000, when it was at a 30-year record low of only 3.9 percent.
For the week ending May 26, the U.S. Department of Labor (DOL) also reported fairly good news, depending on how you look at it. Although initial unemployment claims rose by 8,000 to 419,000 in that particular week, the 4-week moving average actually declined by 1,500, from the revised average in the preceding week. If the 419,000 figure doesn't increase if and when revised, then the decline in the 4-week moving average will hold true or get better if the figure is revised downward. A decline in the moving average is a good sign in these bad times, as it indicates that fewer workers are getting laid off and filing initial unemployment claims.
But, as they have for several months, manufacturing workers suffered the brunt of job cuts in May, losing a whopping 124,000. Since last July, 675,000 manufacturing workers have lost their jobs, with over two-thirds of the losses occurring from December through May. Workers in electronic equipment, industrial machinery, motor vehicles and fabricated metals suffered most, as they have for some time now. The unemployed workers in these four industries account for almost half of the total manufacturing job cuts since December.
On the flipside, 31,000 construction workers went back to work or landed new construction gigs in May, after 78,000 (revised up from 64,000) lost their jobs in April. The BLS had speculated that some of the April job loss might have been temporary, if it could be attributed to heavy rains falling over much of the country. It looks like the BLS might have been at least partially correct in its speculation, but, it didn't mention it this time around. The average monthly job gain of 18,000 since the beginning of 2001 is the same as the average for all of 2000.
The net gain of 42,000 across the services industry only partially offset the loss of 78,000 in April. Among the industries taking the hardest beatings in prior months, temporary-help services didn't gain jobs in May, but, at least it didn't lose any either and remained virtually unchanged. (Temporary workers are typically among the first on the chopping block in bad times. 370,000 have lost their jobs since September.) With a gain of only 3,000 in May, job growth in computer and data processing services continued to show signs of slowing. The gain is well below the already-meager, average monthly gain of 6,500 from January through April, 2001, which is slightly less than half of what it was in the same period a year ago. Engineering and management services suffered only small job losses, while business services and motion pictures suffered significantly, to the tune of 56,000. Jobs increased by 76,000 in educational, health, social and agricultural services.
Net job gains across the service-producing industry continued. Finance, insurance, and real estate led the pack in May, with a gain of 22,000 jobs and a net gain of 112,000 since July, 2000. Employment also rose at mortgage banks and brokerages, but, security brokerages cut 3,000 jobs. Employment among security brokerages has shown signs of weakening in prior months, probably thanks to the unstable stock market. Commercial banks have shown steady job growth in March through May, after a two-year downturn.
Retail trade employment was virtually unchanged in May. In April, it gained 41,000 jobs at eating and drinking establishments, reversing the total job loss in March. Building material stores, general merchandise stores, and auto dealerships showed job increases in May, but, were offset by declines in furniture, apparel, and food stores. The retail trade has shown average monthly job growth in 2001, although at an average of 21,000, it's a little slower than in 2000.
Mining employed 4,000 additional workers in May, all in oil and gas extraction. This is the only industry within mining that has grown in 2001, adding 19,000 jobs since the beginning of the year. To speculate, the gain is likely because of pressure to increase production, in an attempt to curtail rising energy costs.
Transportation and public utilities offset April's decline, with a gain of 12,000 jobs in May. Monthly job increases have averaged 5,000 so far this year, but, the BLS indicated that it's sluggish when compared to last year's figure of 14,000.
Wholesale trade employment took another hit in its continuing downward spiral, mostly in the distribution of durable goods. An additional 14,000 workers lost their jobs in May.
The full employment report for May, along with a multitude of other labor and economic data, are available from the BLS. See also the DOL. |
