January 2002 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 January, and the unemployment rate decreased to 5.6 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Nonfarm payroll employment declined by 89,000 over the month, as job losses continued in manufacturing and construction employment also fell.

Unemployment (Household Survey Data)

The number of unemployed persons declined in January by 337,000, to 7.9 million (after seasonal adjustment). The unemployment rate decreased by 0.2 percentage point to 5.6 percent, reversing an increase of the same size in December. The rate was 1.7 percentage points above its most recent low of 3.9 percent reached in October 2000. (See table A-1.)

In January, the unemployment rate for adult women decreased by 0.4 percent- age point to 4.8 percent after rising by 0.3 percentage point in December. Jobless rates for adult men (5.2 percent), teenagers (16.1 percent), whites (5.0 percent), blacks (9.8 percent), and Hispanics (8.1 percent) showed little or no change. (See tables A-1 and A-2.)

Total Employment and the Labor Force (Household Survey Data)

Total employment fell by 587,000 in January to 133.5 million, after seasonal adjustment. The employment-population ratio dropped by 0.4 percent- age point to 62.6 percent. Over the past 12 months, the number of employed persons has declined by 2.4 million and the employment-population ratio has fallen by 1.8 percentage points. (See table A-1.)

Over the month, the number of persons working part time despite their preference for full-time work decreased by 294,000 to 4.0 million, after seasonal adjustment. Over the year, however, the number of these persons working part time for economic reasons has risen by 685,000. (See table A-4.)

The civilian labor force fell by 924,000 in January, to 141.4 million persons. The labor force participation rate--the proportion of the population that is either working or looking for work--fell to 66.4 percent. (See table A-1.)

About 7.0 million persons (not seasonally adjusted) held more than one job in January. These multiple jobholders represented 5.3 percent of the total employed, the same as a year earlier. (See table A-10.)

Persons Not in the Labor Force (Household Survey Data)

In January, the number of persons not in the labor force who reported that they currently want a job rose by 163,000 to 4.8 million, seasonally adjusted. These individuals are not counted as unemployed because they had not searched for work in the 4-week period preceding the survey. Most had not searched for over a year. (See table A-1.)

About 1.5 million persons (not seasonally adjusted) were marginally attached to the labor force in January, up from 1.3 million persons a year ago. 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 319,000 in January, essentially unchanged from 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 89,000 in January to 131.2 million, seasonally adjusted. Since the recession began in March 2001, payroll employment has declined by 1.4 million. In January, job losses continued in manufacturing, and construction experienced its first large employment decline since last April. Services employment was about unchanged over the month. (See table B-1.)

Manufacturing employment fell by 89,000 in January, compared with average losses of 137,000 a month in the fourth quarter of 2001. Within manufacturing, motor vehicle employment decreased by 22,000, reflecting temporary shutdowns for inventory control. Large employment declines continued in industrial machinery (-19,000). Primary metals and electrical equipment each lost 11,000 jobs in January, and employment in fabricated metals fell by 10,000. In nondurable goods manufacturing, declines continued in printing and publishing (-8,000) and textile mill products (-4,000).

Elsewhere in the goods-producing sector in January, construction employment fell by 54,000, despite relatively mild weather across most of the country. The decline was spread throughout special trades (-33,000), heavy construction (-16,000), and general building contractors (-5,000). Mining lost jobs for the third consecutive month in January. This industry's employment had been on a growth trend since September 1999, reflecting expansion in oil and gas extraction. January's employment decline was primarily in metal mining (-2,000).

Employment in the services industry was about unchanged in January, following a net decline of 192,000 in the fourth quarter of 2001. Help supply services employment was essentially unchanged in January; employment has fallen by 661,000 since its recent peak in September 2000. Computer services lost 18,000 jobs in January and has dropped by 34,000 since June 2001. Hotels lost 7,000 jobs in January; since peaking in March 2001, employment in this industry has declined by 124,000. In contrast, employment gains continued in health services in January, and social services had an above-average increase of 15,000.

Elsewhere in the service-producing sector, employment was unchanged over the month in transportation and public utilities, following seven consecutive monthly declines that totaled 211,000. In January, employment in air transportation rose after seasonal adjustment because extremely light holiday-season hiring by air courier services resulted in fewer layoffs than usual. Communications continued to lose jobs; since its peak last July, employment has declined by 26,000.

In finance, both depository institutions and mortgage brokerages continued to add workers, aided by low interest rates. Employment in security and commodity brokerages was little changed in January, following a large decline in December.

Wholesale trade employment continued its downward trend in January. The industry has lost 145,000 jobs since its peak in November 2000. Employment in government was essentially unchanged in January.

Following losses that totaled 241,000 in the last 5 months of 2001, retail trade posted a seasonally adjusted gain of 62,000 jobs in January. Seasonal hiring for the holidays in department, apparel, and miscellaneous retail stores (such as toy stores) had been very light. As a result, there were fewer seasonal layoffs than usual in January, resulting in large employment gains after seasonal adjustment. An employment decline of 22,000 in eating and drinking places more than offset the small gains of the prior 2 months and brought total job losses in the industry since July to 129,000. In January, car dealers added 4,000 jobs, following similar increases in November and December.

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 34.0 hours, seasonally adjusted. Following an increase of 0.3 hour in December, the manufacturing workweek edged down by 0.1 hour to 40.5 hours in January. Manufacturing overtime was up by 0.1 hour to 3.9 hours. (See table B-2.)

The index of aggregate weekly hours of production or nonsupervisory workers on private nonfarm payrolls decreased by 0.4 percent in January to 148.1 (1982=100), seasonally adjusted. The index has fallen by 2.7 percent from its recent peak in January 2001. The manufacturing index fell by 0.9 percent to 92.6 in January 2002 and has fallen by 9.7 percent since January 2001. (See table B-5.)

Hourly and Weekly Earnings (Establishment Survey Data)

Average hourly earnings of production or nonsupervisory workers on private nonfarm payrolls were unchanged in January at $14.59, seasonally adjusted. This followed a gain of 5 cents (as revised) in December. Average weekly earnings fell by 0.3 percent in January to $496.06. Over the year, average hourly earnings increased by 4.0 percent and average weekly earnings grew by 2.8 percent. (See table B-3.)