BUREAU OF LABOR STATISTICS, DAILY REPORT, THURSDAY, MAY 2, 2002: New claims for unemployment insurance dipped last week, suggesting that companies are laying off fewer workers as the budding economic recovery unfolds. The Labor Department reports today that for the work week ending April 27, new claims for jobless benefits went down by a seasonally adjusted 10,000 to 418,000, the lowest level since March 23. In another report, orders to U.S. factories rose for the fourth straight month, a solid 0.4 percent rise in March. The figure was largely boosted by stronger demand for nondurable goods, such as food, clothes, paper products and chemicals, the Commerce Department said. Total nondurable goods were up 1.6 percent in March, the biggest increase in 2 years. Orders also rose for some manufactured goods, including metals, construction machinery, household appliances and defense equipment. The report reinforces the view that the nation's manufacturers -- which sharply cut production and saw hundreds of thousands of jobs evaporate during the recession -- are on the comeback trail. In the jobless-claims report, even with the decline, a government analyst said, the level was inflated as a result of a technical fluke. The distortion is coming from a requirement that laid-off workers seeking to take advantage of a federal extension for benefits must submit new claims. Many economists are forecasting a rise in April's jobless rate to 5.8 percent and estimating that businesses added around 55,000 jobs during the month. The government will release the April employment report tomorrow. Even as the economy bounces back from recession, some economists expect the jobless rate will peak to just over 6 percent by June. That's because companies will be reluctant to quickly hire back laid-off workers until they are assured the recovery is here to stay (Jeannine Aversa, Associated Press, http://www.nandotimes.com/business/story/388937p-3092372c.html).
Layoff announcements at U.S. firms bounced back up in April after a drop in March in a sign that the recovering U.S. economy could take some time to gather steam, Challenger, Gray & Christmas said today. The outplacement firm said in a monthly report that job cuts announced in April totaled 112,649 or 10 percent more than the 102,315 layoffs announced in March. While the April figure represents a 32 percent decline from the same month in 2001, total job cut announcements so far this year remain perilously close to the record pace of layoffs seen last year, Challenger said. Telecommunications led the pack of downsizing industries -- one in three job cuts took place in the beleaguered telecom sector (Reuters, http://www.washingtonpost.com/wp-dyn/articles/A20631-2002May2.html). Deaths, injuries and illnesses on the job are happening too frequently in the United States despite annual workplace safety efforts, writes Robert A. Jordan in the Boston Globe (http://www.boston.com/dailyglobe2/122/business/Budget_cuts_imperil_workplac e_safety+.shtml). Nearly 6,000 workers were killed from traumatic injuries and more than 6.3 million suffered other injuries or illnesses on the job in 2000, the most recent year data was available from the Bureau of Labor Statistics. Evidence continues to mount that the economy is recovering at a slower pace than in the first quarter. Two reports released yesterday suggest the recent spurt in economic growth is tapering off, with manufacturing expanding at a slower rate last month and construction activity dropping (The Wall Street Journal, page A6). Data compiled by the Bureau of National Affairs through April 29 show that the average first-year wage increase in newly negotiated contracts was 4.2 percent, compared with 3.9 percent in 2001. The median first-year wage increase for settlements reported to date in 2002 was 3.8 percent, compared with 3.6 percent a year ago, and the weighted average increase was 2.2 percent, compared with 5 percent in 2001 (Daily Labor Report, page D-1). A report released by the Bureau of Economic Analysis on April 23 suggests that personal income -- and the economy -- were weaker in 2001 than previously thought. Based on newly available data on wages, salaries, bonuses and other payments to labor, the new figures chop about $90 billion, or about 1 percent, off personal income. These revised figures bolster the case that last year's slowdown really does deserve to be called a recession. According to the new data, real personal income rose by only 0.1 percent from the first quarter of 2001 -- when the downturn officially started -- to the end of the year. That's still relatively mild compared with the 1990-91 recession, but it's consistent with the distress that many Americans felt last year. The downward revisions were the biggest in California, with third-quarter personal income reduced by 2.5 percent below the previous estimate. Close behind were other tech-heavy states, such as North Carolina, Virginia, and Massachusetts (Business Week, May 6, page 26). Nonfarm payrolls in April are forecast to have risen by 50,000 jobs, after adding 58,000 positions in March, according to the May 6 Business Week (page 112), which comments on the employment figures the Bureau of Labor Statistics is expected to cite tomorrow in its "Employment Situation" news release. Manufacturers probably shed an additional 20,000 jobs. The unemployment rate is expected to have risen to 5.8 percent, from 5.7 percent in March, while the average workweek probably held steady at 34.2 hours. The economy may be on the mend, but graduating college students are still facing a dismal job market. Hiring has plummeted. Employers expect to hire 36 percent fewer college graduates in 2001-02 than they hired in 2000-01, according to a study in April by the National Association of Colleges and Employers (NACE). Some fields are especially hard hit: College hiring projections among consulting employers plunged 90 percent. More than 20 percent of graduating students cite lack of experience as their biggest barrier to finding a job, according to the NACE study. Another 20 percent blame the economy. More than 80 percent of respondents would accept a part-time job or internship this summer just to have some form of employment, according to an informal poll by MonsterTrak, an online site for students and recent graduates. Even those lucky enough to land jobs are getting smaller salaries than in years past (USA Today, page 1A). A longstanding vacancy at the Labor Department's office of public affairs was filled recently, when the Senate confirmed Kathleen M. Harrington as head of the agency's press operations. Harrington was confirmed as assistant secretary of labor for public affairs on April 26. She served as assistant secretary of labor for congressional affairs in the late 1980s during the senior Bush's administration under then-Labor Secretary Elizabeth Dole. The nomination of economist Kathleen Utgoff, a pension official who served in the Reagan administration, as head of BLS is pending (Daily Labor Report, page A-17). DUE OUT TOMORROW: The Employment Situation: April 2002
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