BLS DAILY REPORT, MONDAY, FEBRUARY 5, 2001
__Widespread layoffs in the manufacturing sector pushed the unemployment
rate up to 4.2 percent in January, even as employer payrolls grew by
268,000, the Labor Department's Bureau of Labor Statistics reports. BLS
Commissioner Katharine Abraham said in a briefing that the sharp payroll
growth, following a downward revised increase of only 19,000 in December,
was mostly attributable to "unusually large seasonally adjusted increases in
just two areas -- construction and the federal government." Although the
sharp level of payroll growth was mostly due to an anomaly caused by BLS's
seasonal adjustments, economists say the report signals a significant
decline in the likelihood of a recession. Gordon Richards, an economist at
the National Association of Manufacturers, said the increase in jobs was
three times larger than what had been expected and should help sustain
consumer spending in the first quarter. ... (Brett Ferguson in Daily Labor
Report, page D-1; text of Commissioner's statement, page E-1).
__The nation's unemployment rate rose to 4.2 percent in January, its highest
level in 16 months, as heavy manufacturers continued to lay off thousands of
permanent and temporary workers. At the same time, government, hospitals,
and building contractors continued to expand their payrolls during the
month, providing crucial support to an U.S. economy that many analysts
believe has stopped growing. Economists said the January jobs report
confirms the emergence of a two-tiered economy in which auto, steel, and
appliance manufacturers have sunk deep into recession while the once-booming
technology sector runs in place and consumers continue to spend modestly on
restaurant meals, travel, and clothes. ... (Steven Pearlstein in Washington
Post, Feb. 3, page A1).
__Responding to a slowing of the economy, the unemployment rate rose in
January to 4.2 percent -- the highest level in 15 months -- as the number of
jobs in manufacturing continued to shrink. But the huge service sector,
bucking the ebbing tide in American industry, produced enough new jobs to
clearly suggest that the overall economy had not tipped into recession. And
consumer confidence, which fell sharply in December and early January,
appeared to stabilize by the end of the month, according to the latest
survey by the University of Michigan's Consumer Research Center. ... BLS
said that the number of new jobs it reported for January overstated the
strength of the labor market, largely because of unusual weather patterns
and a shift in the Postal Service's Christmas hiring. The report showed an
increase of 145,000 construction jobs and 54,000 government jobs, but Thomas
Nardone, chief of the Division of Labor Force Statistics, said a more
realistic number would be closer to 75,000 construction jobs and 9,000 for
government. ... (Louis Uchitelle in New York Times, Feb. 3, page A1).
__America's extraordinarily low unemployment rate is beginning to feel
pressure from the sharp economic slowdown, but not enough to prove the
entire economy has followed manufacturing into recession. ... The report
was the first comprehensive look at the entire economy for January.
Previous reports had found that the industrial sector's decline accelerated
during the month, and the payroll report provided further confirmation. ...
Katharine Abraham, who heads the Labor Department's Bureau of Labor
Statistics, noted that average payroll growth over the past 4 months has
fallen 45 percent to 102,000 from the prior 9 months. . (Greg Ip in Wall
Street Journal, page A2).
The Wall Street Journal's feature "Tracking the Economy" (page A6) shows
that the Thomson Global Forecast for productivity in the fourth quarter of
2000, to be released Wednesday, is predicted to show a rise of 1.5 percent.
The actual productivity figure for the previous quarter was 3.8 percent.
The fourth quarter increase for unit labor costs is predicted to be 3.5
percent, compared with 2.5 percent in the third quarter.
"The Bureau of Labor Statistics ... is one of those places that the good
government gurus like to call an 'island of excellence.' In the big
bureaucratic sea, BLS sails along at a fast clip, getting the job done and
doing it right," writes Stephen Barr in the "Federal Diary" feature of The
Washington Post (Feb. 4, page C2). But in at least one regard, BLS is no
different than the rest of the government. In the next 5 years, 24 percent
of its approximately 2,570 employees will be eligible to retire. Economists
make up about half the BLS staff and, as might be expected, have the largest
number of retirement eligible (243 people, or 19 percent) of any of the
agency's occupational groups. BLS projections also show that nearly 60
percent of senior executives and senior technical staff workers will qualify
for retirement by 2005. The top white-collar grades could lose a third
(GS-14) to a half (GS-15) of their numbers. "Whatever way you cut this, we
stand to lose a big hunk of our experienced staff. It is a concern," BLS
Commissioner Katharine G. Abraham said. ... Under Commissioner Abraham, BLS
has started to make more aggressive use of financial recruitment incentives
authorized by Congress. Two years ago, it began paying bonuses of $5,000 to
$10,000 to top prospects. In some cases, BLS pays an employee's moving
expenses. Abraham also hopes she can make use of a new rule that permits
agencies to repay student loans. In coming years, BLS needs to take a more
strategic approach to workforce development issues, Abraham said. ...
Despite layoff reports and recession fears, clients of placement firm
Challenger, Gray & Christmas Inc. found a strong job market at the end of
last year. It says the median length of the job search in the fourth
quarter of 1999 was 3.65 months, but in the fourth quarter of 2000 it was
2.47 months. The median tenure at former jobs in the fourth quarter of 1999
was 10 years, but in the fourth quarter of 2000 it was 8 years. The percent
employed less than 2 years at the former job were 13.2 in the fourth quarter
of 1999, but 20.56 in the fourth quarter of 2000. The percent who have
worked for four or more companies was 29.9 percent in the fourth quarter of
1999, but 41.13 percent in the fourth quarter of 2000. Clients taking a new
job at a smaller company were 68.23 percent in the fourth quarter of 1999,
but 56.73 percent in the fourth quarter of 2000 (Washington Post, page E2).
Propane, a liquefied gas, the sole source of heat for 140,000 rural homes in
Iowa or 14 percent of all the homes in that state, and for 8 million others
across the upper Midwest and the Carolinas, is normally a manageable
expense, accounting for up to 4 or 5 percent of a family's income. But the
price has jumped to its highest levels, doubling or tripling in one year in
many places. For many households, especially those on fixed incomes,
filling the tank for a month can cost more than the rent or the mortgage
payment. ... Because of the season's unusual cold, the Department of
Energy's Energy Information Agency reported this week that nearly 19 million
gallons of propane, almost a third of the entire national supply on hand in
October, were burned in December, the most ever burned in one month. But
there are other reasons, too, for the jump in prices. A byproduct of oil
and natural gas processing, propane has been caught up in the supply and
demand upheaval in the nation's sources of energy. ... (New York Times,
page A1).
While tight labor markets in the last few years have forced employers to
hold down employees' portion of health care premiums, a softening economy
and especially a two-pronged increase in health care costs likely means that
workers will have to pay more and/or face larger deductibles within the next
two years, economists told a panel at the University of California Irvine's
annual Health Care Forecast Conference. ... (Daily Labor Report, page A-6).
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