Continuing a pattern of layoffs that began in August
2000, employment in the manufacturing industry declined, keeping nonfarm payroll
employment at a growth rate well below that of a year ago (past five month
average was 103,000, compared to previous nine-month average of 187,000). Strong
employment gains in other industries helped raise nonfarm payroll employment;
and while the unemployment rate remained at 4.2%, a decline in average hours
worked (0.1 hour; 0.3 hour per work week for manufacturing) surprised many
analysts.
The data appears to be signaling a slowing economy
and, according to Eric Green, senior economist, Paribas, New York, 'It reduces
the case for a strong ease at the next Federal Reserve
meeting.'
Total nonfarm payroll increased by 135,000, according
to the Labor Department's February 2001 Employment Report, well above analyst
expectations. The manufacturing decline was offset by increases in services
employment, construction, trade, and others. A deeper look shows:
- Government employment was up 37,000 for a second
straight month.
- Construction employment increased a modest 16,000,
following a 145,000 gain in January.
- Transportation and public utilities employment
rose 28,000, including 15,000 new jobs in air transportation.
- Employment in services gained 85,000 jobs.
- Retail trade rose 37,000, following two months of
little change.
The manufacturing industry lost 94,000 jobs in
February, its seventh consecutive month of job losses. This seven-month string
of losses is long enough to qualify as a recession in this part of the industry.
Furthermore, combined losses in January and February of this year total more
than all manufacturing job losses for the Year 2000. Except for a gain in motor
vehicle employment (the result of workers returning from temporary layoffs), the
declines were widespread:
- Industrial machinery (11,000)
- Fabricated metals (13,000)
- Electrical equipment (11,000)
- Apparel (11,000)
- Small declines occurred in primary metals,
textiles, paper, and rubber/plastics.
At a Glance: Hours and
Earnings
- The manufacturing workweek decreased 0.3 hour to
40.6 hours; overtime also declined 0.3 hour to 3.8 hours.
- Average hourly earnings rose 7 cents to $14.10,
following no gain in January.
- Average weekly earnings were up 0.2% to
$482.22.
- Over the past 12 months, average hourly earnings
and weekly earnings have increased by 4.1% and 2.9%, respectively.
