BLS DAILY REPORT, MONDAY, JUNE 2, 2000
__Much weaker private payroll employment growth than was expected in May,
coupled with other recent reports, suggest that the U.S. economy has shifted
into a period of more moderate expansion. But most analysts said that the
latest job figures are ambiguous as to the extent of a slowdown. Employers
outside of agriculture added a total of 231,000 jobs in May, a figure that
includes a huge gain of 357,000 temporary workers hired by the Census Bureau
for the population count, according to BLS. Excluding the Census workers,
private industry businesses reduced their workforces by about 116,000 in
May, a drop that followed even larger gains than first were estimated in
March and April. It was the first drop in private-sector employment since
January 1996, when unusually bad weather held down the total. Manufacturers
trimmed their payrolls last month, as did construction firms and others in a
broad spectrum of service industries. "Job losses occurred throughout much
of the private sector in May," BLS Commissioner Katharine Abraham said at a
briefing. ... Hourly earnings continued to show moderation in May, as
average weekly pay rose 3.5 percent from a year earlier. ... (Pam Ginsbach
in Daily Labor Report, page D-1; statement, page E-1; briefing materials,
page E-3).
__Add the job market to the growing body of evidence suggesting the economy
finally may be cooling. Just a month after hitting a 30-year low, the
nation's unemployment rate rose slightly to 4.1 percent in May, surprising
many analysts expecting the rate to remain unchanged. Excluding a burst of
hiring relating to the 2000 census, BLS said, the number of private-sector
jobs fell by 116,000 after gaining 296,000 jobs in April. It was the first
such decline in more than four years. ... Average hourly earnings,
meanwhile, edged up just 0.1 percent, suggesting that many companies were
able to keep wage growth -- a key inflation driver -- largely under wraps.
... (Yochi J. Dreazen in Wall Street Journal, page A2).
__The Labor Department surprised the experts by reporting that the nation's
extremely tight labor markets loosened a bit last month, setting off rallies
on Wall Street with investors cheered by signs that runaway U.S. economic
growth is finally slowing. The unemployment rate rose to 4.1 percent in May
from 3.9 percent in April, which had been the lowest in 30 years. The
number of people with jobs fell by nearly 1 million, the largest monthly
decline in history. ... (John M. Berry and Sandra Sugawara in Washington
Post, June 3, page A1).
__In the strongest signal yet that the booming economy is finally slowing,
the Labor Department reported that the nation's private sector employers
shed 116,000 jobs in May. It was the largest drop in more than eight years
and the first decline since the economy began to soar in the mid-1990's.
The unemployment rate edged up to 4.1 percent from 3.9 percent, with blacks
and Hispanics absorbing most of the loss. Wage increases, which had
accelerated in the early spring, eased in May, reducing concerns about
inflation. Jobs disappeared in almost every sector of the economy, except
government, where the hiring of 357,000 census takers for the once-a-decade
population count offset the decline in business jobs. The report came on
the heels of a half-dozen other indications this week that a still very
strong economy is beginning to cool off, responding to the Federal Reserve's
six interest rate increases over the last year. Car sales and home sales
have dipped recently, partly because of higher car loan and mortgage rates.
Construction spending is off, and manufacturing production appears to have
weakened in May. ... (Louis Uchitelle in New York Times, June 3, page A1).
In a bid to bring the nation's economy in for a soft landing, Federal
Reserve Chairman Alan Greenspan at least has the landing gear down.
Friday's employment report capped a week of statistics that paint a picture
of an economy that's slowing, but not precipitously. Although the evidence
is still tentative, it looks like exactly what Dr. Greenspan ordered:
slower growth, to head off inflation. The six interest-rate increases
engineered by the Fed since last June are beginning, albeit belatedly, to
cool off interest-sensitive sectors such as housing and construction. And
that, in turn, appears to be inspiring a more general slowdown in economic
activity. ... (Wall Street Journal, page A1).
The 1.2 million college graduates in the nation's class of 2000 are entering
an unusually strong job market that is a result of a flourishing economy
and, especially, the boom in high technology. Engineering students from the
Massachusetts Institute of Technology and other universities in the East
have been flown to Silicon Valley and Seattle for audiences with billionaire
executives, while investment banks have flown Stanford University students
to New York for high-priced dinners accompanied by job offers. Some of the
graduates have landed jobs paying more than $60,000 a year. With
unemployment near its lowest level in three decades, despite the increase in
unemployment announced on Friday, salaries overall for this year's
graduating class are up 6 percent over last year's, job placement experts
say. But those in computer sciences are doing best of all, according to the
National Association of Colleges and Employers, which represents employers
and college job placement officers. ... (New York Times, June 4, page 20).
The steel industry is being hit faster than expected by the recent run-up in
short-term interest rates, with prices for steel products softening or
falling and inventories piling up. ... (Wall Street Journal, page A1).
DUE OUT TOMORROW: Productivity and Costs, First Quarter 2000 (r)
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