BUREAU OF LABOR STATISTICS, DAILY REPORT, THURSDAY, MAY 16, 2002: RELEASED TODAY: In the first quarter of 2002, employers reported 1,669 mass layoff actions that resulted in the separation of 301,181 workers from their jobs for more than 30 days, according to preliminary figures released by the Bureau of Labor Statistics. Reversing the trend of the previous five quarters, both the total number of layoff events and the number of separations were lower than in the same quarter a year earlier. Lack of demand for employers' products and services (slack work) was the major reason cited for layoffs in the first quarter, accounting for 25 percent of all events and 58,931 separations. The number of seasonal events was at the lowest first-quarter level since the program began in 1995 and accounted for 21 percent of all events. Permanent closure of worksites occurred in 20 percent of all events and affected 82,603 workers, up slightly from 81,805 workers a year earlier and the highest first-quarter level on record. Thirty-five percent of the employers with layoffs in the first quarter indicated that they anticipated some type of recall, the smallest proportion on record for a first quarter. This release uses the North American Industry Classification System (NAICS) for the assignment and tabulation of layoff data by industry. Previously, the Standard Industrial Classification (SIC) system was used.
Rising energy costs pushed the consumer price index up 0.5 percent in April, the largest increase in more than a year, according to the Bureau of Labor Statistics. "Price increases were largely concentrated in just a few areas, mainly gasoline and cigarettes," said Wachovia economist Mark Vitner. The energy index increased sharply for the second consecutive month, 4.5 percent in April, following a 3.8 percent increase in March. BLS said the increase in the index for shelter and tobacco and smoking accounted for April's increase. Prices for cigarettes increased 6.8 percent in April, after declining 3.8 percent in March. The increase reflects the wholesale price increase, selected state tax increases, and a reduction in the discounting of selected major brands, BLS said. The so-called "core" inflation rate -- the all-items CPI-U minus energy and food prices, increased 0.3 percent after a 0.1 percent increase in March (Daily Labor Report, page D-1). Manufacturing, the sector of the U.S. economy hit hardest by last year's recession, continued to regain lost ground in April as factory output rose for the fourth month in a row, the Federal Reserve reported yesterday. According to preliminary figures from the Labor Department, production again rose even though the total number of hours worked fell last month -- an indication that productivity continued to rise sharply. Also yesterday, the Labor Department said large increases in gasoline and tobacco-product prices contributed to a 0.5 percent increase in consumer prices last month, the largest monthly rise since last May. The "core" portion of the consumer price index, which excludes food and energy prices, rose 0.3 percent, in part because of the 6.5 percent increase in tobacco prices (John M. Berry, The Washington Post, page E1, http://www.washingtonpost.com/wp-dyn/articles/A22882-2002May15.html). Factories were busier in April and consumer prices posted their sharpest rise in nearly a year, according to reports released yesterday, a sign the recovery was gaining traction. The Federal Reserve said that industry production rose 0.4 percent in April, a fourth consecutive monthly gain that partly reflected a pickup in car production. Separately, the Labor Department reported that consumer prices increased 0.5 percent in April, the biggest gain since a matching rise in May of last year. Analysts had expected a 0.4 percent gain (Reuters, The New York Times, page C2). Investment spending continues to rebound, a positive sign for the economy, but the going is slow, new economic data suggests. The Federal Reserve said industrial production rose 0.4 percent in April from March. Meanwhile, businesses continued to draw down their inventories in March rather than aggressively restock their shelves. Taken together, the numbers paint a picture of an economy that is recovering but still operating on two different -- and at times conflicting -- tracks. Separately, inflation increased more than expected in April, but not enough across the economy to suggest that it will become a problem anytime soon. One concern is that the U.S. dollar, which has weakened in recent weeks, could add to inflation by driving up prices of imports. But economists say it would take a sharper and more sustained drop in the dollar to trigger more inflation (The Wall Street Journal, page A7). A drop in hours worked combined with a sharp rise in consumer prices resulted in a 0.7 percent decline in real weekly earnings for April, according to the Bureau of Labor Statistics. It was the largest monthly decrease in inflation-adjusted earnings since August 1990, when real earnings also fell 0.7 percent, BLS said (Daily Labor Report, page D-19). The number of new jobless claims rose in the latest week, staying above the key 400,000 mark for 2 months, the government said today in a report which also showed the number of people on benefit rolls at its highest in more than 19 years. First-time claims for state unemployment benefits rose 2,000 to 418,000 in the May 11 week, up from a revised 416,000 in the prior week, the Labor Department said. New claims defied expectations for a fall to 402,000 from the 411,000 originally reported for the May 4 week (Reuters, http://usatoday.com/money/economy/2002-05-16-jobless-claims.htm). Data from newly negotiated contract agreements compiled by the Bureau of National Affairs through May 13 show a first-year average wage increase of 4.2 percent, compared with 4 percent in the same period of 2001. The median first-year wage increase for settlements reported to date in 2002 was 3.7 percent, compared with 3.6 percent last year, and the weighted average increase was 2.3 percent, compared with 4.8 percent in 2001 (Daily Labor Report, page D-27). Despite stronger than expected growth in the national economy, New York City continued to show persisting signs of recession in statistics for the first quarter of 2002, city Comptroller William C. Thompson, Jr. reported May 15. In an analysis prepared for the May issue of his office's "Economic Notes" publication, Thompson said total jobs in the city had fallen by 3.6 percent in the 12 months through March, compared with 1.0 percent nationally. It was the biggest loss since 3.8 percent in the first quarter of 1992 and marked the fifth consecutive quarter of employment contraction for the city, he said (Daily Labor Report, page A-11). If soaring health insurance costs are unabated, by 2007 employers may be forced to choose between providing health coverage for their workforce or hiring new workers, the American Benefits council said yesterday. ABC President James A. Klein said ABC's calculations show that health benefits for an entry-level worker in 2007 would cost the company nearly half of that employee's salary alone (Daily Labor Report, page A-9). Americans are taking shorter vacations and more of them are working at jobs that demand long hours, according to a boxed graph in The Wall Street Journal's "Work and Family" feature (page D1). No wonder people are looking for ways to sneak a break, says reporter Sue Shellenbarger. The graph shows average annual hours worked by U.S. workers, 1992 through 2000, according to International Labor Organization data. The article it illustrates concerns "under-timing" at work -- taking catnaps, lunchtime jogs, etc., which it indicates may rejuvenate a worker. DUE OUT TOMORROW: Regional and State Employment and Unemployment: April 2002
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