December 2001 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 continued to decline in December, and the unemployment rate edged up to 5.8 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Nonfarm payroll employment decreased by 124,000 over the month and by 1.1 million over the last 4 months of 2001. In December, job losses continued in manufacturing, transportation, and trade; these losses were partially offset by employment gains in services and government.

Unemployment (Household Survey Data)

The number of unemployed persons continued to rise in December, reaching 8.3 million (after seasonal adjustment). The unemployment rate was up by 0.2 percentage point to 5.8 percent. Over the year, the number of unemployed persons increased by 2.6 million and the unemployment rate rose by 1.8 percentage points. (See table A-1.)

The unemployment rate for adult women increased to 5.2 percent in December. Jobless rates showed little or no change in December for adult men (5.2 percent), teenagers (16.2 percent), whites (5.1 percent), blacks (10.2 percent), and Hispanics (7.9 percent), but unemployment rates for all of these groups increased over the year. (See tables A-1 and A-2.)

The number of unemployed persons who were reentrants to the labor force increased to 2.4 million in December, while the levels of unemployed job losers, job leavers, and new entrants to the labor force were little changed. The number of unemployed job losers not on temporary layoff (persons who did not expect to be recalled) was about unchanged in December, but increased by about 1.7 million over the year. This group constituted 41 percent of the unemployed in December, up from 28.9 percent a year earlier. (See table A-7.)

Total Employment and the Labor Force (Household Survey Data)

Total employment continued to trend down in December, and the employment-population ratio edged down to 63.0 percent. Over the year, employment decreased by about 1.8 million persons, and the employment- population ratio fell by 1.5 percentage points. The number of persons working part time despite their preference for full-time work rose over the year, from 3.2 to 4.3 million. (See tables A-1 and A-4.)

The size of the civilian labor force was about unchanged in December, at 142.3 million persons. The labor force participation rate also was little changed at 66.8 percent. (See table A-1.)

About 7.3 million persons (not seasonally adjusted) held more than one job in December. These multiple jobholders represented 5.4 percent of total employment, compared with 5.7 percent a year earlier. (See table A-10.)

Persons Not in the Labor Force (Household Survey Data)

About 1.3 million persons (not seasonally adjusted) were marginally attached to the labor force in December, up slightly over the year. These individuals reported they wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed, however, because they had not actively searched for work in the 4 weeks preceding the survey. The number of discouraged workers was 344,000 in December, up from 265,000 a year earlier. Discouraged workers, a subset of the marginally attached, were not currently looking for work specifically because they believed no jobs were available for them. (See table A-10.)

Industry Payroll Employment (Establishment Survey Data)

Total nonfarm payroll employment fell by 124,000 in December, seasonally adjusted, and private-sector employment fell by 187,000. Since the recession began in March, the number of nonfarm payroll jobs has declined by 1.4 million. In December, large declines continued in manufacturing, air transportation, retail trade, and help supply services. Employment increased in health services, private education, and government. (See table B-1.)

Manufacturing employment fell by 133,000 in December, bringing the total drop for the year to 1.3 million. Over the month, nearly every manufacturing industry continued to lose jobs. Large employment declines continued in both electrical equipment (-28,000) and industrial machinery (-24,000). Transportation equipment, which includes motor vehicle and aircraft manufacturing, lost 18,000 jobs in December. In 2001, a number of industries lost more than 10 percent of their total employment--electrical equipment (-15.2 percent), leather (-14.5 percent), apparel and textiles (-13.1 percent each), primary metals (-10.8 percent), industrial machinery (-10.7 percent), and furniture (-10.6 percent).

Elsewhere in goods-producing industries in December, employment fell by 5,000 in mining. Most of the decline was in oil and gas extraction, which had employment gains for most of the year but lost 6,000 jobs in the fourth quarter of 2001. Over the month, construction employment was little changed. Although showing no net growth since the spring, the construction industry has not experienced the employment declines that typically occur in a recession.

In the service-producing sector, retail trade employment decreased by 77,000, seasonally adjusted, in December. This was the fifth consecutive monthly decline. Over the period, job losses have totaled 273,000, more than offsetting employment gains that had occurred in the first 7 months of 2001. Continued weak hiring for the holiday shopping season contributed to December job losses (after seasonal adjustment) in general merchandise stores (-28,000), apparel stores (-5,000), and miscellaneous retailers (-39,000) such as toy stores and jewelry stores. Car dealers added 4,000 jobs in December following a similar increase in November, as financing incentives helped boost car sales. Employment continued to decline in wholesale trade (-10,000). Since its peak in November 2000, the industry has lost 136,000 jobs.

Employment declines continued in transportation and public utilities, with a loss of 36,000 jobs in December. The industry has lost 218,000 jobs since its recent peak in May. As was the case in October and November, employment fell sharply in air transportation (-26,000) and transportation services (-6,000), which includes travel agencies. Since September, employment in these industries has dropped by 111,000 and 28,000, respectively, as the terrorist attacks further weakened the business and leisure travel markets. In December, communications lost 6,000 jobs; this was the industry's second consecutive month of job losses. Public utilities lost 5,000 jobs in December.

The services industry added 72,000 jobs in December, following 2 months of employment declines totaling 248,000. In December, job gains continued in health services; the industry added 31,000 jobs over the month and a total of 304,000 jobs in 2001--136,000 in hospitals. Educational services also had a strong employment gain in December (28,000); this industry added 112,000 jobs over the year. Amusement and recreation services added 18,000 jobs in December, following a decline of 29,000 in November. This industry has shown virtually no net employment growth since the beginning of the year. Help supply services, which provides workers to other industries, continued to experience significant employment declines, with a loss of 55,000 jobs in December. Since September 2000, the industry has lost 688,000 jobs, nearly one-fifth of its employment. Job losses also continued in hotels and other lodging places in December. Since its peak in March, employment in this industry has fallen by 115,000.

Government employment increased by 63,000 in December. Both state and local government showed employment gains (19,000 and 36,000, respectively) with much of the growth in education. State government education added 87,000 jobs in 2001--five times the increase in 2000. Similarly, local government education gained 193,000 jobs in 2001--nearly three times its growth in 2000. After a month of little change, employment in local government excluding education grew by 19,000 in December.

Employment in finance grew by 5,000 in December. Refinancing activity continued to spur job growth in mortgage banking. Security and commodity brokerages lost 7,000 jobs in December, for a total loss of 37,000 since March. In December, real estate employment declined by 5,000; employment in the industry has changed little 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 34.2 hours, seasonally adjusted. The manufacturing workweek rose by 0.4 hour to 40.7 hours, and factory overtime increased by 0.2 hour to 3.9 hours. (See table B-2.)

The index of aggregate weekly hours of production or nonsupervisory workers on private nonfarm payrolls was unchanged at 148.7 (1982=100), seasonally adjusted. The index has fallen by 2.3 percent from its recent peak in January 2001. The manufacturing index edged up by 0.1 percent to 93.4 in December but has fallen by 8.6 percent over the year. (See table B-5.)

Hourly and Weekly Earnings (Establishment Survey Data)

Average hourly earnings of production or nonsupervisory workers on private nonfarm payrolls increased by 7 cents in December to $14.61, seasonally adjusted. This followed a gain of 7 cents (as revised) in November. Average weekly earnings rose by 0.8 percent in December to $499.66. Over the year, average hourly earnings and average weekly earnings each rose by 4.1 percent. (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 data of that year. This year, seasonally adjusted data for January 1997-December 2001 were subject to revision. (Seasonally adjusted establishment data will be revised in June, concurrent with the introduction of annual benchmark adjustments.)

The January 2002 issue of Employment and Earnings will contain the new seasonal adjustment factors for major series for the January-June 2002 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 data for the household series contained in the "A" tables of this release also can be accessed on the BLS Internet site at (http://www.bls.gov/cps/cpsatabs.htm). Revised historical seasonally adjusted monthly and quarterly data also are available on the Internet at (ftp://ftp.bls.gov/pub/special.requests/lf/).

1/ Not published.

HOUSEHOLD DATA HOUSEHOLD DATA

2000 2001 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: Data have been revised based on the experience through December 2001.