The percentage of people out of work declined in May, but that had little to do with the manufacturing industry, which suffered through another difficult month of job losses. On a whole, total job losses were modest, as the manufacturing losses were offset by gains in other industries.
The unemployment rate slipped to 4.4%, down from the jump to 4.5% in April. Many economists had predicted the rate would grow even higher in May.
"Good news on all fronts," said Alex Beuzelin, foreign exchange analyst at Ruesch International in Washington. "The payrolls number was not as bad as expected; the unemployment number was also better than expected. This report is going to support the idea that the worst of the downturn is over."
According to the Labor Department's May 2001 Employment Report, total nonfarm payroll fell only 19,000. Gains in the services and construction industries helped offset manufacturing and wholesale trade declines. A closer look at the May results shows:
- Construction employment rebounded from a large April loss (78,000) with an increase of 31,000.
- Employment in services also rebounded from a weak April with a gain of 42,000.
- Wholesale trade dropped for the sixth straight month, losing 14,000; most declines have been in the distribution of durable goods.
- Transportation and public utilities continued its sluggish growth with an increase of 12,000 in May.
- Retail trade employment saw little change, after a gain of 22,000 in April.
The manufacturing industry lost 124,000 jobs in May, bringing its total loss since last July to 675,000. Two-thirds of these losses have occurred since December. Declines continued to be widespread:
- Industrial machinery: 18,000 in April; 70,000 for the year
- Fabricated metals: 15,000; 65,000 for the year
- Electrical/Electronic equipment: 26,000; 77,000 since December
- Motor vehicles: 15,000
These four industries have accounted four half of the job losses within manufacturing since last December.
At a Glance: Hours and Earnings
- After three straight months of no change, the manufacturing workweek declined 0.2 hour to 40.8 hours; overtime remained at 3.9 hours.
- Average hourly earnings rose another 4 cents to $14.26, following a 18-cent combined gain from February to April.
- Average weekly earnings increased 0.6% to $489.12.
- Over the past 12 months, average hourly earnings and weekly earnings have increased by 4.3% and 4.0%, respectively.
The report on June employment will be released on July 6, 2001.
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Read the latest report from the Bureau of Labor Statistics.