December 1998 Employment Situation

Historical release narrative reproduced from the official public-domain source. Statistical tables, standard technical appendices, administrative material and attendance rosters are omitted; formatting is adapted for reading. Figures retain the release's historical context and may have been revised. Consult the linked source for the complete document.

Employment rose in December and the unemployment rate, at 4.3 percent, was little changed, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Nonfarm payroll employment rose by 378,000. Growth was spread throughout the service-producing sector, and unusually mild weather across much of the country contributed to strength in construction.

Unemployment (Household Survey Data)

Both the number of unemployed persons, 6.0 million, and the unemployment rate, 4.3 percent, were little changed in December. The jobless rate has remained within a narrow range of 4.3 to 4.5 percent since April. (See note below.) The unemployment rates for the major worker groups--adult men (3.6 percent), adult women (3.9 percent), teenagers (14.0 percent), whites (3.8 percent), blacks (7.9 percent), and Hispanics (7.6 percent)--showed little or no change in December. (See tables A-1 and A-2.)

Although essentially unchanged in December, the number of persons unemployed 15 weeks and over has declined by about 300,000 over the year, after adjusting for the changes in the composite estimation procedure introduced last January. (See table A-6.)

Total Employment and the Labor Force (Household Survey Data)

Total employment increased by 413,000 in December to 132.5 million, seasonally adjusted. The employment-population ratio--the proportion of the population age 16 and older with jobs--was essentially unchanged at 64.2 percent. Over the year, employment grew by 2.2 million, after adjusting for the changes in the composite estimation procedure. (See table A-1.)

The number of persons employed part time for economic reasons (those who would have preferred full-time work) was 3.4 million in December, about the same as in the previous month. The number of such workers declined by about 330,000 during the past year, after adjusting for changes in the composite estimation procedure. (See table A-4.)

Approximately 8.2 million persons (not seasonally adjusted) held more than one job in December. These multiple jobholders comprised 6.2 percent of total employment, the same share as a year earlier. (See table A-10.)

Over the month, the civilian labor force rose by 354,000 to 138.5 million, seasonally adjusted. The labor force participation rate was 67.2 percent, about unchanged from the previous month. (See table A-1.)

Persons Not in the Labor Force (Household Survey Data)

About 1.2 million persons (not seasonally adjusted) were marginally attached to the labor force in December. These were people who wanted and were available for work and had looked for a job sometime in the prior 12 months but were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. In December, the number of marginally attached workers was 257,000 lower than a year earlier.

The number of discouraged workers--a subset of the marginally attached who were not currently looking for work specifically because they believed no jobs were available for them--was 358,000 in December, about the same as a year earlier. (See table A-10.)

Industry Payroll Employment (Establishment Data)

Nonfarm payroll employment rose by 378,000 in December to 127.2 million, seasonally adjusted. Job growth in 1998 totaled 2.9 million, a 2.3 percent increase. In December, job gains were spread throughout the service-producing sector, construction employment increased sharply, and job losses slowed in manufacturing. (See table B-1.)

The services industry added 111,000 jobs in December, about equal to the monthly average for the year. Employment in business services rose by 49,000, led by the largest increase in personnel supply since August. Nevertheless, growth in personnel supply, which includes temporary help agencies, slowed substantially in 1998 compared to recent years. Robust job growth continued in computer services where employment rose by 13.3 percent for the year. Engineering and management services employment also continued its strong growth, increasing by 7.3 percent in 1998. For the second straight month, agricultural services benefited from unusually mild weather. Employment in health services was little changed in December, and, over the year, the number of health service jobs grew by only 1.3 percent, half its 1997 rate. Home health care and nursing homes both lost jobs in 1998.

Construction employment grew throughout much of 1998 and in December jumped by 104,000 (after seasonal adjustment). This robust increase was due in part to unseasonably warm temperatures in the North and East. Employment gains were widespread within the industry, with the largest increases in outside activities such as highway construction, masonry, roofing, and concrete.

Employment in retail trade rose by 53,000 in December, the second large increase in a row. Over the year, retail trade employment increased by 462,000. In December, eating and drinking places added 33,000 jobs. A

strong employment build-up for the holiday shopping season in department stores also contributed to the over-the-month gain in retail trade. In contrast, apparel stores and miscellaneous retail establishments did not hire for the holiday season at the usual pace, resulting in employment declines after seasonal adjustment both in December and over the September- December period as a whole. Reflecting the strength in construction, employment in building material and garden supply stores had its largest increase of the year in December (9,000).

Transportation and public utilities employment rose in December by 32,000, the largest over-the-month change for that industry in 1998. Strong growth in air transportation (13,000), trucking and warehousing (9,000), and communications (9,000) accounted for most of the increase.

Finance, insurance, and real estate added 28,000 jobs in December, bringing its over-the-year growth to 273,000 jobs. Within finance, strong growth continued in mortgage banking and brokerages, where employment rose by 4,000 in December and by 19.8 percent over the year. Security brokerages also added 4,000 workers in December, offsetting a decline in the prior month; this industry grew by 7.6 percent in 1998. Insurance and real estate both continued their growth trends.

Government employment increased by 59,000 in December, led by gains in state and local education. Federal government employment declined by 21,000, seasonally adjusted, due in part to light holiday hiring in December by the Postal Service and the ending of an early phase of work on the decennial census.

Manufacturing employment continued to decline, although the loss of 13,000 jobs in December was much smaller than the declines in the prior 2 months. Since March, the number of factory jobs has fallen by 272,000. Within durable goods industries, employment in industrial machinery declined by 10,000 in December, bringing the total losses since March to 54,000. A decline of 9,000 jobs in motor vehicles manufacturing followed a small drop in November and left auto employment down 12,000 for the year. Within nondurable goods industries, employment in food products increased by 8,000, primarily in the preserved fruits and vegetables industry, which tends to have volatile month-to-month movements. Employment in manufacturing industries related to construction and home purchases (lumber; furniture; and stone, clay, and glass) grew in December and over the year.

Weekly Hours (Establishment Survey Data)

The average workweek for production or nonsupervisory workers on private nonfarm payrolls edged up by 0.1 hour in December to 34.6 hours, seasonally adjusted. The manufacturing workweek increased by 0.2 hour to 41.8 hours, while factory overtime was 4.5 hours for the fourth consecutive month. (See table B-2.)

The index of aggregate weekly hours of production or nonsupervisory workers on private nonfarm payrolls rose by 0.5 percent to 146.5 (1982=100), seasonally adjusted. The manufacturing index increased by 0.3 percent to 107.5. (See table B-5.)

Hourly and Weekly Earnings (Establishment Survey Data)

Average hourly earnings of production or nonsupervisory workers on private nonfarm payrolls rose 5 cents in December to $12.98, seasonally adjusted; this follows 3 months of smaller gains. Average weekly earnings increased 0.7 percent to $449.11. Over the year, average hourly and weekly earnings have risen by 3.8 percent and 3.5 percent, respectively. (See table B-3.)

Revision of Seasonally Adjusted Household Survey Data

At the end of each calendar year, BLS routinely updates the seasonal adjustment factors for the labor force series derived from the Current Population Survey (also referred to as the household survey) to incorporate the experience of that year. This year, seasonally adjusted data for January 1994-December 1998 are subject to revision. (Seasonally adjusted establishment data will be revised in June, concurrent with the introduction of annual benchmark adjustments.)

The January 1999 issue of Employment and Earnings will contain the new seasonal adjustment factors for major series for the January-June 1999 period. The publication also will contain a description of the current seasonal adjustment methodology and revised data for the most recent 13 months or quarters for all regularly published tables containing seasonally adjusted household survey data. Historical seasonally adjusted monthly and quarterly data also are available on the Internet. Internet users can access these data from the ftp://ftp.bls.gov/pub/special.requests/lf directory. Historical data for the household series contained in the "A" tables of this release also can be accessed at the end of the Employment Situation news release on the BLS internet site.

1/ Not published.

Planned Changes in the Household Survey Data

Effective with the release of data for January 1999, revisions will be introduced into the population controls used for the household survey. These revisions primarily reflect new information on immigration and will result in an upward shift in the estimated total civilian noninstitutional population 16 years and over for January 1999. The changes will add approximately 308,000 to routine population trend growth between December 1998 and January 1999. The impact will vary for subpopulations such as men (-183,000), women (+491,000), Hispanic origin (-163,000), and non-Hispanic origin (+471,000). The changes and their effect on the estimates of labor force change and composition will be described in an article slated to appear in the February 1999 issue of Employment and Earnings.

HOUSEHOLD DATA HOUSEHOLD DATA

1997 1998 Employment status, sex, and age Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.

TOTAL

Men, 20 years and over

Women, 20 years and over

Both sexes, 16 to 19 years

1 The population figures are not adjusted for seasonal variation. NOTE: Beginning in January 1998, data reflect new composite estimation procedures and revised population controls used in the household survey. Seasonally adjusted data have been revised based on the experience through December 1998.