| The Job Situation | |
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According
to a March 8, 2002 report by the Bureau of Labor Statistics (BLS),
the U.S. unemployment rate dropped slightly from 5.6 to 5.5 percent in February. Nonfarm employment
showed a net gain of 66,000 after several months of significant job losses. It was the first net
gain in one month since July, 2001.
According to CBSMarketWatch, analysts were surprised that the employment gain exceeded their most-positive expectations by as much as 54,000. On the negative side, they thought the unemployment rate might leap back up to December's 5.8 percent. Wall Street rejoiced on the day of the unexpected news.
But Wall Street plays by different rules. The BLS also issued precautionary statements indicating that the unemployment rate remained virtually unchanged from January, and the gains that dropped it by one-tenth of a percent were at least partly because of special factors among certain industries. Analysts issued similar precautionary statements. Some have indicated that employers may not start hiring trends until they're sure the economy is turning around, despite Federal Reserve Chairman Alan Greenspan's recent declaration that the recession is over.
The industries showing February employment gains included
- Retail
- Motor vehicle manufacturing
- Construction
- Temporary help services
- Engineering and management services
- Health services
- Mortgage banking
- Government
Temporary help services experienced its first employment gain in months, while retail accounted for 58,000 of the total. But since retailers didn't add many workers for the holidays as they usually do, the BLS cautioned that they had fewer to send to the ranks of the unemployed. They also said that unusually warm and dry weather for construction, and a return to work from temporary plant shutdowns in motor vehicle manufacturing, both influenced February's net gains. Next month's unemployment numbers might tell the real story.
| March 14 Update: Initial unemployment insurance claims fell for the second week in a row in the period ending March 9, indicating that layoffs are slowing. However, continuous claims rose 96,000 to nearly 3.48 million, indicating that employers have not started a hiring trend. |
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Chart data from the Bureau
of Labor Statistics
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Copyright © 2002, J. Steven Niznik. All Rights Reserved.