Posted on 06/06/2003 7:13:36 AM PDT by Starwind
UPDATE - US jobless rate up, but payrolls show mild drop Friday June 6, 8:57 am ET By Caren Bohan
(Adds market, analyst reaction, more details)WASHINGTON, June 6 (Reuters) - The U.S. unemployment rate rose in May to its highest level in nearly nine years but an unexpectedly mild jobs drop and an overhaul earlier figures fueled hopes the soft economy may be poised for a pickup.
Equity futures prices and the dollar gained while bond prices eased following Friday's key employment report from the Labor Department.
The unemployment rate inched up to 6.1 percent, the highest level since July 1994, from 6.0 percent in April, Labor said. Employers cut 17,000 workers from their payrolls in May -- a smaller decline than the 39,000 drop projected by U.S. economists in a Reuters survey.
The May jobs report included a major change in how Labor compiles its survey and calculates its results. These changes rendered the recent job picture less gloomy than it had appeared in earlier government estimates.
April payrolls were revised to an unchanged reading after Labor had earlier said they tumbled 48,000. However, March was revised down to show a 151,000 jobs drop versus an earlier 124,000 fall. In total, 151,000 jobs were lost over the two months, an improvement from Labor's prior report of a 172,000 slide in payrolls.
Before the jobs report came out, some investors were betting the Federal Reserve might cut interest rates by as much as an aggressive half-point at its upcoming meeting on June 24-25. But the data persuaded some analysts that the cut might be a smaller quarter-point. A few thought the central bank could possibly even hold off on lowering rates altogether.
"What does this say about the Fed? I'm of the opinion that the Fed should practice some sort of tough love and not seek to lower rates at the next meeting," said Jeoff Hall, economist at Thomson IFR in Boston.
"If you believed that they were going to do at least 25, then I think this number confirms they would do only 25," he said.
Within the report, the data on hours worked and overtime were mixed. Total hours worked in the private sector stayed steady at 33.7 hours. But the factory workweek lengthened slightly to 40.2 hours from 40.1 hours.
Average hourly earnings rose 0.3 percent to $15.34.
THE EMPLOYMENT SITUATION: MAY 2003
Both nonfarm payroll employment and the unemployment rate were about
unchanged in May, the Bureau of Labor Statistics of the U.S. Department of
Labor reported today. There were job gains in temporary help services and
construction, while losses continued in manufacturing.
Unemployment (Household Survey Data)
The unemployment rate was 6.1 percent in May; the number of unemployed
persons was 9.0 million. Over the month, the unemployment rate for
Hispanics increased to 8.2 percent. The rates for whites and adult men
edged up to 5.4 and 5.9 percent, respectively. The jobless rates for the
other major worker groups--adult women (5.1 percent), teenagers (18.5 per-
cent), and blacks (10.8 percent)--showed little or no change from the
previous month. The unemployment rate for Asians was 5.1 percent, not
seasonally adjusted. (See tables A-1, A-2, and A-3.)
The number of unemployed job losers and persons who completed temporary
jobs rose by 309,000 to 5.1 million in May. The number of persons unemployed
less than 5 weeks edged up to 3.1 million. There were 1.9 million persons
unemployed for 27 weeks or longer in May, about the same as in April. This
measure has increased by 347,000 over the past 12 months. (See tables A-8
and A-9.)
Total Employment and the Labor Force (Household Survey Data)
The employment-population ratio edged down to 62.3 percent in May; total
employment, at 137.5 million, was not significantly different from April's
level. Over the month, the civilian labor force and labor force participa-
tion rate were unchanged at 146.5 million and 66.4 percent, respectively.
(See table A-1.)
Persons Not in the Labor Force (Household Survey Data)
In May, 1.4 million persons were marginally attached to the labor force,
about the same as a year earlier. These individuals wanted and were
available to work and had looked for a job sometime in the prior 12 months.
They were not counted as unemployed, however, because they did not actively
search for work in the 4 weeks preceding the survey. There were 482,000
discouraged workers in May, essentially unchanged from May 2002. Discour-
aged workers, a subset of the marginally attached, were not currently
looking for work specifically because they believed no jobs were available
for them. (See table A-13.)
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| Revisions to Establishment Survey Data |
| |
| Several major changes affect the establishment survey data |
| being released today, including the conversion from the Standard |
| Industrial Classification system to the North American Industry |
| Classification System (NAICS), the completion of a sample redesign |
| phase-in, and the introduction of concurrent seasonal adjustment. |
| All historical establishment survey data were reconstructed to |
| reflect the switch to NAICS. Additionally, this release incor- |
| porates annual benchmark adjustments and updated seasonal adjust- |
| ment factors for historical data. More information on these |
| changes is provided in the note beginning on page 5. |
---------------------------------------------------------------------
- 2 -
Table A. Major indicators of labor market activity, seasonally adjusted
(Numbers in thousands)
_____________________________________________________________________________
. | Quarterly | |
. | averages | Monthly data |
. |_________________|__________________________| Apr.-
. Category | 2002 |2003 1/ | 2003 | May
. |________|________|__________________________|change
. | IV | I | Mar. | Apr. | May |
_________________________|________|________|________|________|________|______
. HOUSEHOLD DATA | Labor force status
. |___________________________________________________
Civilian labor force.....| 145,241| 145,829| 145,793| 146,473|146,485| 12
. Employment.............| 136,657| 137,430| 137,348| 137,687|137,487| -200
. Unemployment...........| 8,584| 8,399| 8,445| 8,786| 8,998| 212
Not in labor force.......| 73,302| 74,280| 74,524| 74,067| 74,283| 216
. |________|________|________|________|_______|______
. | Unemployment rates
. |___________________________________________________
All workers..............| 5.9| 5.8| 5.8| 6.0| 6.1| 0.1
. Adult men..............| 5.5| 5.4| 5.3| 5.6| 5.9| .3
. Adult women............| 5.2| 4.9| 5.0| 5.1| 5.1| .0
. Teenagers..............| 16.1| 17.2| 17.7| 18.0| 18.5| .5
. White 2/...............| 5.1| 5.1| 5.1| 5.2| 5.4| .2
. Black or African | | | | | |
. American 2/..........| 10.7| 10.3| 10.2| 10.9| 10.8| -.1
. Hispanic or Latino | | | | | |
. ethnicity............| 7.8| 7.7| 7.5| 7.5| 8.2| .7
. |________|________|________|________|_______|______
. ESTABLISHMENT DATA 3/ | Employment
. |___________________________________________________
Nonfarm employment.......| 130,338| 130,225| 130,084|p130,084|p130,067| p-17
. Goods-producing 4/.....| 22,389| 22,213| 22,159| p22,104| p22,075| p-29
. Construction.........| 6,732| 6,719| 6,720| p6,757| p6,783| p26
. Manufacturing........| 15,085| 14,926| 14,874| p14,784| p14,731| p-53
. Service-providing 4/...| 107,949| 108,012| 107,925|p107,980|p107,992| p12
. Retail trade.........| 15,015| 14,997| 14,995| p15,008| p14,994| p-14
. Professional and | | | | | |
. business services..| 16,007| 16,013| 15,980| p15,981| p16,029| p48
. Education and health | | | | | |
. services...........| 16,348| 16,429| 16,452| p16,498| p16,516| p18
. Leisure and | | | | | |
. hospitality........| 12,040| 12,089| 12,050| p12,043| p12,034| p-9
. Government...........| 21,547| 21,570| 21,547| p21,545| p21,520| p-25
. |________|________|________|________|________|______
. | Hours of work 5/
. |___________________________________________________
Total private............| 33.8| 33.8| 33.8| p33.7| p33.7| p0.0
. Manufacturing..........| 40.4| 40.4| 40.4| p40.1| p40.2| p.1
. Overtime.............| 4.3| 4.3| 4.1| p4.0| p4.1| p.1
. |________|________|________|________|________|______
. | Earnings 5/
. |___________________________________________________
Avg. hourly earnings, | | | | | |
. total private..........| $15.15| $15.27| $15.29| p$15.29| p$15.34|p$0.05
Avg. weekly earnings, | | | | | |
. total private..........| 511.96| 515.50| 516.80| p515.27| p516.96| p1.69
_________________________|________|________|________|________|________|______
1 Beginning in January 2003, household data reflect revised population
controls used in the Current Population Survey.
2 Beginning in 2003, persons who selected this race group only were
included in this category. Persons who selected more than one race group
are included only in the "all workers" total. Prior to 2003, persons who
reported more than one race were included in the group they identified as
the main race.
3 Establishment data reflect the conversion to the 2002 version of the
North American Industry Classification System (NAICS) as the basis for the
assignment and tabulation of economic data by industry, replacing the 1987
Standard Industrial Classification (SIC) system. Due to differences in
NAICS and SIC structures, NAICS-based data by industry are not comparable
to the SIC-based data. In addition, the establishment data reflect March
2002 benchmark levels, the completion of the conversion of the survey
sample from a quota basis to a probability basis, a modification of the
seasonal adjustment process, and other changes. See the note beginning on
page 5 for more information on the changes.
4 Includes other industries, not shown separately.
5 Data relate to private production or nonsupervisory workers.
p=preliminary.
- 3 -
Industry Payroll Employment (Establishment Survey Data)
The following discussion of employment developments from the establishment
survey reflects the introduction of new industry classifications. See the
note beginning on page 5.
Total nonfarm payroll employment was little changed (-17,000) in May at
130.1 million. Payroll employment has declined by 2.5 million since peaking
in February 2001. The private sector has lost 3.1 million jobs over the same
period, with manufacturing accounting for the bulk of the job losses.
(See table B-1.)
In May, employment in natural resources and mining continued the downward
trend that began in June 2001. The industry has lost 50,000 jobs over that
period, with about half of the losses in support activities for mining.
Construction employment rose by 26,000 in May. Employment in specialty
trade contractors showed the largest increase. Construction lost 160,000
jobs from March 2001 to February 2003 but has gained back about half of
those losses over the last 3 months. The recent job growth has occurred in
construction of buildings and in special trade contracting.
Manufacturing employment decreased by 53,000 in May, about the same as
its average monthly decline for the prior 12 months. Since July 2000, the
industry has lost 2.6 million jobs, a decline of about 15 percent. May job
losses were widespread in both durable and nondurable goods. The largest
decline occurred in computer and electronic products (-16,000); employment
in the industry has decreased every month since January 2001. Transporta-
tion equipment employment was up by 9,000 over the month, as workers re-
turned from temporary auto plant shutdowns. Since its most recent peak in
October 1998, employment in transportation equipment manufacturing has
decreased by 320,000.
Employment in wholesale trade continued to trend downward in May. The
industry has lost 386,000 jobs since its peak in March 2000. Retail employ-
ment was little changed over the month. It declined by 374,000 from its peak
in February 2001 through the end of 2002 but has been essentially flat thus
far in 2003.
Job losses continued in transportation and warehousing over the month.
Employment declined by 5,000 in air transportation; the industry has lost
113,000 jobs since its peak in March 2001.
Information sector employment was essentially unchanged in May. Since
its peak in March 2001, the industry has lost 417,000 jobs. Declines
occurred throughout the component industries of the sector, including
telecommunications; publishing industries, except Internet; and Internet
service providers (ISPs), search portals, and data processing.
Employment in financial activities continued to grow in May. Credit
intermediation and related activities, which includes mortgage brokerages,
added 19,000 jobs over the month. Since July 2000, employment in credit
intermediation and related activities has increased by about a quarter of
a million.
Professional and business services added 48,000 jobs in May, bolstered
by strong growth in temporary help services (58,000). Employment in
temporary help services peaked in April 2000 and fell sharply until late
2001. Since then, it has remained at about 2.2 million.
- 4 -
Education and health services employment continued to grow; the industry
has added a million jobs since March 2001. Within this sector, employment
rose over the month in ambulatory health care services (such as doctors'
offices and outpatient care centers). Social assistance lost 10,000 jobs
in May, 6,000 of which were in child day care services.
Employment in leisure and hospitality was little changed in May. This
industry, which includes arts, entertainment, and recreation; accommoda-
tions; and food service and drinking places has lost about 100,000 jobs
since January.
Weekly Hours (Establishment Survey Data)
The average workweek for production or nonsupervisory workers on private
nonfarm payrolls was unchanged in May at 33.7 hours, seasonally adjusted.
This followed a decline of 0.1 hour in April. The manufacturing workweek
gained 0.1 hour in May, bringing it to 40.2 hours. This followed a decline
of 0.3 hour in April. Manufacturing overtime edged up by 0.1 hour to 4.1
hours in May. (See table B-2.)
The index of aggregate weekly hours of production or nonsupervisory
workers on private nonfarm payrolls was unchanged in May at 98.7 (2002=100).
The manufacturing index was down by 0.2 percent over the month to 95.0.
(See table B-5.)
Hourly and Weekly Earnings (Establishment Survey Data)
Average hourly earnings of production or nonsupervisory workers on
private nonfarm payrolls increased by 5 cents in May to $15.34, seasonally
adjusted. This followed no change in April. Average weekly earnings rose
by 0.3 percent in May to $516.96. Over the year, average hourly earnings
grew by 3.2 percent, and average weekly earnings increased by 2.6 percent.
(See table B-3.)
______________________________
The Employment Situation for June 2003 is scheduled to be released on
Thursday, July 3, at 8:30 A.M. (EDT).
- 5 -
Revisions to Establishment Survey Data
Effective with the release of data for May 2003, several major changes
have been introduced to the Current Employment Statistics (CES), or
establishment, survey. These changes include the conversion to a new
industrial classification system, the completion of a sample redesign, and
the introduction of concurrent seasonal adjustment methodology, which
updates seasonal factors each month. In addition, the establishment data
incorporate routine annual benchmark revisions and accompanying revisions
to seasonally adjusted data.
NAICS conversion. Effective with this release, all CES employment,
hours, and earnings series have been converted from the 1987 Standard
Industrial Classification (SIC) system to the industries had already been converted to the
probability sample with the exception of the services division (as defined
under SIC). Data in this release reflect the conversion of all industries
in the services division to the probability-based sample.
Level shifts. With the completion of the redesign phase-in, new base
levels have been computed for CES hours, earnings, production and
nonsupervisory workers, and women workers series, from the NAICS-based
probability sample. These recomputations have resulted in level shifts for
some of the industry series, as compared with previously published data.
In earlier stages of the redesign phase-in, a methodology that prevented
level shifts was utilized in order to avoid repeated disruption of the
industry series during the phase-in period.
- 6 -
Benchmark revisions. In accordance with standard annual practice, the
CES survey data have been revised to incorporate comprehensive universe
counts of payroll jobs, or benchmarks, with the release of May 2003
preliminary estimates. These counts are derived principally from
unemployment insurance tax records for March 2002. The benchmark revision
process affects all unadjusted data series from April 2001 forward, the
time period since the last benchmark was established. Normally, 5 years of
seasonally adjusted data are revised with each benchmark revision. However,
with this release, the entire new time series history for all CES data
series has been reseasonally adjusted due to the NAICS conversion, which
results in the revision of all CES time series history.
Concurrent seasonal adjustment. Beginning with this release, current
monthly establishment data are adjusted using a concurrent seasonal
adjustment methodology. The March 2003 final estimates and the April and
May 2003 preliminary estimates are adjusted using the concurrent method.
Similarly, in all subsequent months, the first preliminary estimates for
the current reference month and the revised estimates for the 2 prior
months will be updated with concurrent factors with each release. This is
a change from the previous practice of updating seasonal factors semian-
nually. Concurrent seasonal adjustment is more accurate because it incor-
porates all available data, including first preliminary estimates for
the most current month, in the adjustment process. Research has
demonstrated that the concurrent methodology results in smaller revisions
between first preliminary and final estimates. Due to this change in
methodology, BLS will no longer publish seasonal factors in advance for the
CES estimates.
Table B presents revised total nonfarm employment data on a seasonally
adjusted basis for January 2002 through April 2003. The revised data
reflect the effects of the benchmark revisions, NAICS conversion,
completion of the sample redesign phase-in, changes in the federal
government series, and new seasonal adjustment factors.
Further information. The BLS public database on the Internet, LABSTAT,
contains all revised CES data released today. All LABSTAT series codes
associated with the establishment survey data have been revised to reflect
the NAICS conversion. The prefix for CES national series has been changed
from EE to CE for the NAICS-based series and the length of the series code
has been expanded by two digits to accommodate the more detailed NAICS
coding structure. The SIC-based series have been retained on LABSTAT under
the EE prefix, but the series end with the first preliminary estimates for
April 2003; they will not be updated.
Further descriptive information on the NAICS conversion and the other
changes described above also is available on LABSTAT. The CES data and
related information can be accessed through the CES homepage at
http://www.bls.gov/ces/. Information also may be obtained by calling
202-691-6555. Additionally, the June 2003 issue of Employment and Earnings
will contain an article that discusses the NAICS conversion, the benchmark
revision, and the other changes introduced with this release.
- 7 -
Table B. Revisions in nonfarm employment, seasonally adjusted,
January 2002-April 2003
(In thousands)
_______________________________________________________________________
. | |
. | Levels | Over-the-month changes
. |---------------------|---------------------------------
.Year and month| As | As | As | As |
. |previously| revised |previously| revised | Difference
. |published | |published | |
_______________|__________|__________|__________|__________|___________
2002: | | | | |
. January....| 130,871 | 130,578 | -19 | -83 | -64
. February...| 130,706 | 130,510 | -165 | -68 | 97
. March......| 130,701 | 130,481 | -5 | -29 | -24
. April......| 130,680 | 130,415 | -21 | -66 | -45
. May........| 130,702 | 130,411 | 22 | -4 | -26
. June.......| 130,736 | 130,383 | 34 | -28 | -62
. July.......| 130,790 | 130,204 | 54 | -179 | -233
. August.....| 130,913 | 130,224 | 123 | 20 | -103
. September..| 130,829 | 130,289 | -84 | 65 | 149
. October....| 130,898 | 130,408 | 69 | 119 | 50
. November...| 130,817 | 130,409 | -81 | 1 | 82
. December...| 130,670 | 130,198 | -147 | -211 | -64
2003: | | | | |
. January....| 130,873 | 130,356 | 203 | 158 | -45
. February...| 130,520 | 130,235 | -353 | -121 | 232
. March......| 130,396 | 130,084 | -124 | -151 | -27
. April (p)..| 130,348 | 130,084 | -48 | 0 | 48
_______________|__________|__________|__________|__________|___________
p = preliminary.
The number of unemployed job losers and persons who completed temporary jobs rose by 309,000 to 5.1 million in May. The number of persons unemployed less than 5 weeks edged up to 3.1 million. There were 1.9 million persons unemployed for 27 weeks or longer in May, about the same as in April. This measure has increased by 347,000 over the past 12 months. (See tables A-8 and A-9.)
Top line, 6.1% unemployment, up a tenth.
Manufacturing continues a fast decline, down by 53,000 jobs in May after losing 90,000 in April. Retail trade lost 14,000 jobs in May (though it previously gained 13,000 in April), and Leisure & Hospitality lost 9,000 jobs in May and lost 7,000 jobs in April.
These job losses were offset by Construction gaining 26,000 in May following a gain of 37,000 in April; Professional Services gaining 48,000 in May (bolstered by strong growth in temporary help services (58,000) -i.e. not permanent jobs, but temporary jobs) and 1,000 in April; and Education & Health Services gaining 18,000 in May and 46,000 in April
Goverenment jobs lost 25,000 in May and lost 2,000 in April. This is likely accelerating state & city budget cuts.
This reinforces that manufacturing is declining while service and construction continue to recover.
Presumably, the 130,067,000 million jobs remaining after the net loss of 17,000 jobs in May was also reduced by the 313,000 'assumed new jobs' which the BLS now realizes never existed (see AN UNEMPLOYMENT STORY WASHINGTON WON'T RELEASE).
WASHINGTON, June 6 (Reuters) - U.S. Labor Department seasonally adjusted jobs data. In 1,000s, Change May April (Prev) March (Prev) in Nonfarm Payrolls -17 UNCH -48 -151 -124 Jobless Rate (Pct) 6.1 6.0 6.0 5.8 5.8 Earnings, Hours of Private, Non-Farm Production workers: . May April (Prev) March (Prev) Avg Weekly Hours 33.7 33.7 34.0 33.8 34.3 Manufacturing Hours 40.2 40.1 40.5 40.4 40.8 Overtime Hours 4.1 4.0 3.9 4.1 4.0 Earnings/Hour (dlrs) 15.34 15.29 15.11 15.29 15.09 Non-Farm Month-On-Month Payroll Changes by Industry (1,000s): . May April March Total Private 8 2 -110 Goods-Producing -29 -55 -32 Construction 26 37 20 Manufacturing -53 -90 -48 Service-Providing 12 55 -119 Trade/transp/utilities -25 -6 -8 Information -6 2 -3 Financial activities 12 23 14 Professional/business services 48 1 -63 Leisure/hospitality -9 -7 -34 Government -25 -2 -41 Aggregate Weekly Hours Indexes, Seasonally Adj. (1982=100) . May April Total Private (pct change) UNCH -0.3 Manufacturing (pct change) -0.2 -1.4 Total Private (index) 98.7 98.7 Manufacturing (index) 95.0 95.2 Note--The indexes show total aggregate hours of production or nonsupervisory workers on private nonfarm payrolls by industry. Pool of available workers Seasonally adj in mlns . May April . 13.742 13.203 . Pct change . 4.1 -1.9 . HOUSEHOLD SURVEY-Civilian Employment, Seasonally Adj. (Monthly change in 1,000s): . May April Workforce 12 680 Employed -200 339 Unemployed 212 341 JOB LEAVERS May April Total 772 829 As Pct of unemployed 8.6 9.4 FORECAST: Reuters survey of U.S. economists forecast for May: 39,000 drop in U.S. non-farm payrolls 6.1 pct jobless rate +0.2 average hourly earnings 34.1 average work week HISTORICAL COMPARISONS/NOTES: BENCHMARK REVISES US MAR02 JOBS DOWN 313,000,BUT OTHER CHANGES SHOW IT DOWN 203K The nonfarm payroll data is based on a survey of employers and the jobless rate is based on a survey of households. Beginning with the May report, the department revised its employment data under the North America Industry Classification System (NAICS). The May report also reflects annual benchmark revisions and updated seasonal adjustment factors.
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