BUREAU OF LABOR STATISTICS, DAILY REPORT, MONDAY, MAY 6, 2002: Despite other signs that the economy has turned around, the U.S. labor market remained weak in April, as the unemployment rate climbed to 6.0 percent and payrolls grew very little, according to the Bureau of Labor Statistics. It was the highest jobless rate since August 1994, and represented about 8.6 million unemployed persons. Payrolls outside of agriculture increased by only 43,000 in April, and a downward revision turned what had been first estimated as a small gain in March into a small decline. Led by what BLS calls "help supply services," the services sector added 87,000 jobs in April after a gain of 72,000 in March. "This marked the first time the (services) industry has had substantial consecutive monthly increases in over a year, said Acting BLS Commissioner Lois Orr at a May 3 briefing. Help-supply firms added 66,000 jobs last month (Daily Labor Report, page D-1).
The U.S. unemployment rate last month was the highest in nearly eight years, 6 percent, as employers continued to expand production without hiring workers, the Labor Department reported yesterday. Despite a very strong rebound in economic growth following last year's recession, unemployment rose from 5.7 percent in March and surpassed the recession peak of 5.8 percent in December. The rate hasn't been 6 percent since august 1994. Many analysts expect a further increase in unemployment until continued economic growth encourages more hiring (John M. Berry, May 4, The Washington Post, page A1). The unemployment rate surged last month to 6 percent, its highest level in almost 8 years, the government said yesterday, in a sign that many companies are too worried about the economy to begin hiring again. The Labor Department's report raised the possibility that the current economic recovery could resemble the so-called jobless recovery of the early 1990's, when unemployment continued to rise for many months after a recession had ended (David Leonhardt, The New York Times, May 4, page A1). The labor market swelled by more than a half million people in April, but a large number of them couldn't find work, suggesting the economy's rebound isn't strong enough to reverse a weak job market. Although the Labor Department said nonfarm payrolls grew by 43,000 -- the first monthly gain in 9 months after the March increase was revised to a slight decline -- the uptick wasn't nearly enough to absorb the jump in new people seeking work. The labor force expanded to a record 142.6 million people (The Wall Street Journal, page A3). The U.S. services sector expanded for the third consecutive month in April, the Institute of Supply Management reports. The nonmanufacturing business index stood at 55.3 percent. March had an index of 57.3 percent. The industries reporting the highest rates of growth of business activity in April were agriculture, transportation, insurance, real estate, wholesale trade, and retail trade. The industries reporting contraction of business in April were mining, entertainment, and finance and banking (Daily Labor Report, page A-2; Reuters, http://www.usatoday.com/money/economy/2002-05-03-ism-service-index.htm). The number of U.S. technology workers plunged by nearly 530,000 in the past year, a drop of nearly 5 percent, according to a national study by the Information Technology Association of America to be released today. The report also lays out employment prospects for some of the nation's 10 million techies, providing numbers to match the uncertain mood among many job seekers. The survey projects that employers will fill about 570,000 technology positions this year, based on interviews with 532 hiring managers. That assumes businesses soon will begin to purchase more computers, software and other cutting-edge products, stimulating firms to increase production and bring on more workers, a scenario that is still being debated. A separate study released last week by Information Week magazine said that tech workers' pay had dipped by 11 percent, to $63,000, compared with a median compensation package of $71,000 last year (The Washington Post, page E1; The Wall Street Journal, page B6). After a year of massive layoffs and the loss of more than a half million technology jobs nationwide, the managers who hire technology workers predict so much hiring in 2002 that they won't be able to fill all the jobs. A survey released today by the Information Technology Association of America shows that the number of technology jobs in the United States fell from 10.4 million in 2001 to 9.9 million in early 2002, about a 5 percent drop. Beneath these numbers is evidence of even greater turmoil in the job market. The overall job loss came from companies eliminating 2.6 million positions while hiring 2.1 million workers. The survey also found that demand for IT workers in the West has fallen 71 percent since 2000, suggesting that local workers' situation may be worse than the nationwide picture (http://www.bayarea.com/mld/bayarea/business/3206736.htm). DUE OUT TOMORROW: Productivity and Costs -- First Quarter 2002
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