January 1999 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 January and the unemployment rate was unchanged at 4.3 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Nonfarm payroll employment rose by 245,000, about in line with the average for the prior 12 months. Gains occurred in most major industry divisions. Average hourly earnings increased by 6 cents.

Unemployment (Household Survey Data)

The number of unemployed persons, 6.0 million, was about unchanged in January, and the unemployment rate held at 4.3 percent, seasonally adjusted. The jobless rate has remained within a narrow range of 4.3 to 4.5 percent since last April. Among the major worker groups, the unemployment rate for Hispanics fell to 6.6 percent in January. The jobless rates for the other major demographic groups--adult men (3.4 percent), adult women (3.7 percent), teenagers (15.5 percent), whites (3.8 percent), and blacks (7.8 percent)--showed little or no change over the month. (See tables A-1 and A-2.)

Total Employment and the Labor Force (Household Survey Data)

Total employment rose by 814,000 in January after adjustment for the effect of revisions to population controls. (See the note on page 5.) The employment-population ratio--the proportion of the population age 16 and older with jobs--reached a record 64.5 percent, up 0.3 percentage point from the previous month. (See table A-1.)

The civilian labor force increased by 742,000, again after adjustment for the effect of population control revisions. The labor force participation rate rose to 67.4 percent, also a record. (See table A-1.)

Approximately 7.9 million persons (not seasonally adjusted) held more than one job in January. These multiple jobholders comprised 6.0 percent of total employment, the same rate as a year earlier. (See table A-10.)

Persons Not in the Labor Force (Household Survey Data)

About 1.4 million persons (not seasonally adjusted) were marginally attached to the labor force in January. 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.

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 339,000 in January, about the same as a year earlier. (See table A-10.)

Industry Payroll Employment (Establishment Data)

Nonfarm payroll employment, at 127.3 million, seasonally adjusted, increased by 245,000 in January, about equal to the average gain over the prior 12 months. Employment growth was widespread in the service-producing sector, and the construction industry added jobs despite unusually adverse winter weather in some parts of the country. Job losses continued in manufacturing and mining. (See table B-1.)

The services industry added 114,000 jobs in January, in line with its average for the prior 12 months. Employment in business services rose by 48,000 in January. Strong growth continued in computer and data processing services, which added 17,000 jobs. In contrast, employment growth in help supply services remained sluggish. Engineering and management services registered a relatively large over-the-month employment increase (27,000) in January and continued on its strong growth trend. Social services continued its steady growth, adding 10,000 jobs. Health services experienced its third consecutive month of slower growth, adding only 6,000 jobs. A decline in home health care employment largely offset a gain in offices and clinics of doctors. A January job gain of 13,000 in amusements and recreation reversed a decline of similar magnitude in December.

Retail trade employment increased by 30,000 in January. January is the month when retail stores lay off most of the workers who were hired for the holiday shopping season. Department stores had stronger-than-usual employment build-up for the holidays, so there were more people to let go in January. As a result, employment declined by 31,000, after seasonal adjustment. In contrast, apparel stores and miscellaneous general merchandise stores, such as bookstores, jewelry stores, and gift shops, had below-normal holiday hiring. This led to fewer-than-usual layoffs in January and large employment increases, after seasonal adjustment. These gains largely offset the decline in department stores. A second month of strong employment gains in building supply stores reflected the strength in construction activity.

Wholesale trade employment rose by 28,000 in January, following a small increase in December. A large gain in the nondurable goods component (20,000) was led by grocery wholesaling. In durable goods distribution, professional and commercial equipment accounted for the increase.

Employment in transportation and public utilities rose by 22,000 in January, after seasonal adjustment. Within transportation, trucking added 12,000 jobs; this was the second consecutive month of above-average growth in the industry. Telephone companies continued to lead the growth in communications, which added 11,000 jobs in January.

Finance, insurance, and real estate added 22,000 jobs in January. Within finance, the over-the-month gain of 11,000 was spread among the various types of banks, brokerages, and other investment offices. In real estate, employment also increased by 11,000 in January, more than twice the average monthly gain for the prior 12 months. This industry has benefited from low mortgage rates. In contrast, for the first time in two years, insurance did not add jobs.

Local government employment increased by 35,000 in January, with both the educational and noneducational components adding jobs. State and federal government employment levels were essentially unchanged.

In the goods-producing sector, construction employment continued to rise, after seasonal adjustment. January's gain of 15,000 jobs was substantially smaller than December's large increase. Exceptionally severe weather in the upper Midwest and Northeast during the January survey reference period curtailed construction activity in those parts of the country. Outdoor construction activity--roofing and masonry within special trades and the highway portion of heavy construction--was most affected by the bad weather. In contrast, employment growth among general building contractors was strong for the second month in a row.

Manufacturing employment continued to decline in January, although the loss of 13,000 jobs was the smallest since September. Industrial machinery has experienced steep declines, losing 15,000 jobs in January and 69,000 since March. Electronic equipment employment also continued to decline, dropping by 6,000 jobs in January; this was slightly less than the average loss for the prior six months. Employment in the apparel industry also continued downward in January, falling by 8,000. Since its most recent peak in November 1991, employment in apparel manufacturing has dropped by 294,000, or 29 percent. In January, lumber had a particularly large job increase (8,000), reflecting construction's strength. Fabricated metals showed its first employment increase since August, and motor vehicles had its first job gain since October. Food products and rubber and miscellaneous plastics also had employment increases in January; gains in these industries over the past three months offset losses sustained in mid- 1998. Mining continued its long-term downward trend in January, losing 9,000 jobs. In recent months, employment declines have accelerated in oil and gas extraction.

Weekly Hours (Establishment Survey Data)

The average workweek for production or nonsupervisory workers on private nonfarm payrolls edged down by 0.1 hour in January to 34.5 hours, seasonally adjusted. The manufacturing workweek decreased by 0.2 hour to 41.5 hours, while factory overtime was 4.5 hours for the fifth consecutive month. (See table B-2.)

The index of aggregate weekly hours of production or nonsupervisory workers on private nonfarm payrolls was unchanged at 146.2 (1982=100), seasonally adjusted. The manufacturing index decreased by 0.6 percent in January to 106.8, reflecting the decrease in the factory workweek. (See table B-5.)

Hourly and Weekly Earnings (Establishment Survey Data)

Average hourly earnings of production or nonsupervisory workers on private nonfarm payrolls rose by 6 cents in January to $13.04, seasonally adjusted. Average weekly earnings increased by 0.2 percent to $449.88. Over the year, average hourly and weekly earnings have risen by 4.0 percent and 3.1 percent, respectively. (See table B-3.)

Revisions to Population Estimates for the Household Survey

Effective with the release of data for January 1999, revised population controls, primarily reflecting updated information on immigration, have been introduced into the household survey. The revised controls resulted in an increase of 307,000 in the estimated size of the civilian noninstitutional population 16 years of age and over for December 1998. The impact on the population varied by demographic group. (See table below.)

The revised controls increased the estimated size of the civilian labor force and of employment by about 60,000 each, with more substantial, but offsetting, changes among population subgroups. The population revisions had a negligible impact on unemployment rates and other percentage estimates. An article describing these revisions and their effect on national labor force estimates will appear in the February 1999 issue of Employment and Earnings.