BLS DAILY REPORT, TUESDAY, SEPTEMBER 5, 2000
___For the second straight month, private business payrolls grew at a more
sluggish pace than most forecasters had expected. But the news was
generally welcomed as another sign that the U.S. economy is gradually
cooling from what policymakers are regarded as an expansion that was too
close to overheating. Private industry employers added only 17,000 workers
in August, but the total was held down by the telephone communications
worker strike against Verizon Communications, according to BLS. Revised
figures show that, in July, private payrolls grew by 164,000, or somewhat
more than first estimated. Payrolls outside of agriculture fell by 105,000
in August -- held down by layoffs of temporary Census Bureau workers
employed for the population count as well as the communications strike.
Revised data showed that nonfarm payrolls shed 51,000 jobs in July, only
about half the loss first estimated. Factories cut jobs in August, and the
pace of construction hiring remained sluggish as higher interest rates
dampened housing activity. ... Commissioner Abraham told reporters at a
briefing, "On the whole, these first major economic indicators for August
point to continued moderation in job market activity." ... The household
survey showed a 0.1 percent point rise in the civilian unemployment rate to
4.1 percent. The jobless rate has stayed in the narrow range of 3.9 percent
to 4.1 percent since last October. ... (Pam Ginsbach in Daily Labor Report,
page AA-1).
___More clearly than ever, three new economic reports show the U.S. economy
coming in smoothly for a soft landing. A series of increases in short-term
interest rates by the Federal Reserve and other forces have combined to slow
economic growth just enough to keep inflation largely at bay without
significantly raising the risk of a recession. ... In the most important of
the reports, the Labor Department said the number of workers on employers'
payrolls fell by 105,000 last month, primarily because the jobs of 158,000
people hired temporarily to conduct the decennial census came to an end. ...
The National Association of Purchasing Management said its index of
conditions in the manufacturing portion of the economy declined last month
to 49.5 from 51.8. When the index is below 50, it means that U.S.
manufacturing activity is contracting, and it was the first time the figure
has been below that break-even point since January 1999. Finally, the
Commerce Department reported that construction spending fell 1.6 percent in
July, the fourth consecutive monthly decline. ... (John M. Berry in
Washington Post, Sept, 2, page E1).
___ In another clear signal that the economy is slowing in response to
rising interest rates, the nation's private employers created only 17,000
jobs in August, and the unemployment rate rose to 4.1 percent from 4
percent. ... Manufacturing jobs fell, with electronics the only bright
production sector. ... (Louis Uchitelle in New York Times, Sept. 2, page
B1).
___ Once again a batch of economic data points to a slowdown. The big
question in the coming months is this: Will the underlying momentum of the
New Economy again confound conventional ways of reading the indicators?
Some economists think so. Consider the numbers released Friday.
Private-sector employment barely grew, unemployment rose, while
manufacturing and construction spending shrank. In the old days, that
combination would have set off alarm bells about a seriously weakening
economy. Yet most economists still feel comfortable with forecasts showing
the economy growing at an annual pace faster than 3 percent, many at 4
percent and some even higher. Last month's uptick in unemployment was
distorted by special events, while the health of the economy is no longer as
dependent on the manufacturing sector as in the past. ... (Nicholas Kulish
in Wall Street Journal, page A2).
As employers clamor for more foreign-born workers and as tens of thousands
of Mexicans slip across the border each year, the percentage of immigrant
workers in the nation's labor force has climbed to its highest level in
seven decades. New figures from the Bureau of Labor Statistics showed that
the number of immigrant workers jumped to 15.7 million last year, up 17
percent from three years earlier. ... This influx -- immigrants now
represent 12 percent of the nation's workers -- is having profound effects
on the work force and the economy, helping hold down wages in unskilled jobs
and giving many companies the employees needed to expand. ... (New York
Times, Sept. 4, page A1).
One of the tightest labor markets in decades has made it possible for more
people who were working part time to find full-time work. Surprisingly, the
percentage of people working for personnel companies -- those that supply
temporary or continuing help on a contractual basis --has risen. Mark Zandi
of Economy.com says the reason is that people are finding such work more
"attractive." He said, "Not only has pay for such jobs increased
significantly, but an increasing number also pay benefits. Moreover, these
jobs offer employees significant flexibility." ... Charts on part-time
workers and workers in personnel companies are credited to BLS (New York
Times, page C1).
An upswing in hours worked is largely responsible for the increase in income
of the "typical" American family between 1995 and 1999, according to a book
released by the Economic Policy Institute. After adjusting for inflation,
the median wage for all workers grew 6.4 percent between 1995 and 1999,
according to the newly released book, the State of Working America, 2000-01,
by EPI economists Lawrence Mishel, Jarad Bernstein, and John Schmidt. "The
most important factor contributing to the income growth of the last decade
was the increase in the number of hours that families worked each year," the
book says. "In 1998, for example, the typical middle-income married-couple
family worked a total of 3,600 hours (adding spouses' total annual hours
together). This represented an increase of 182 hours -- or about four and a
half full-time weeks more than a similar family worked in 1989." Gains have
been made at all wage levels since 1995, but especially at the lowest. ...
(Daily Labor Report, page A-4).
DUE OUT TOMORROW: Productivity and Costs -- Second Quarter 2000 (r)
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