October 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.

Both nonfarm payroll employment and the unemployment rate were about un- changed in October, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Job losses in the construction, manufacturing, and help supply industries were offset by gains in a number of other industries, among them finance, real estate, and health services.

Unemployment (Household Survey Data)

The number of unemployed persons (8.2 million) and the unemployment rate (5.7 percent) were essentially unchanged in October. The unemployment rate for adult women edged up to 5.2 percent while the rates for the other major worker groups--adult men (5.2 percent), teenagers (14.6 percent), whites (5.1 percent), blacks (9.8 percent), and Hispanics (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, as measured by the household survey, edged down in October to 134.9 million, after seasonal adjustment. This followed a large increase in September. The employment-population ratio, which had increased in September, declined to 62.9 percent. (See table A-1.)

The civilian labor force, at 143.1 million, seasonally adjusted, was little changed from the prior month. The labor force participation rate declined to 66.7 percent. (See table A-1.)

About 7.2 million persons (not seasonally adjusted) held more than one job in October. These multiple jobholders represented 5.4 percent of the total employed. (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 October, little changed from a year earlier. These individuals reported that 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 355,000 in October, also about unchanged from the same month a year earlier. Discouraged workers, a subset of the marginally attached, were not looking for work specifically because they believed no jobs were available for them. (See table A-10.)

Industry Payroll Employment (Establishment Survey Data)

Nonfarm payroll employment was virtually unchanged (-5,000) in October at 130.9 million, although there were offsetting movements among various industries. Employment also had held steady in September (-13,000 as revised). In the 4 months prior to September, payroll employment had increased by nearly a quarter of a million; this followed a loss of 1.8 million from March 2001 to April 2002. (See table B-1.)

Manufacturing employment declined by 49,000 over the month. The pace of factory job losses increased in the last 3 months, averaging 47,000 a month since July, compared with 20,000 a month from April to July. Employment in wholesale trade, an industry affected by manufacturing activity, showed a similar, though less pronounced, pattern. In manufacturing, October job losses were concentrated primarily within durable goods, including electronic and electrical equipment, primary metals, fabricated metals, and aircraft and parts manufacturing. Em- ployment in the electronics industry has fallen by 44,000 in the past 3 months, following smaller losses in late spring and early summer. In nondurable goods manufacturing, the apparel industry lost 7,000 jobs in October, following a similar decline in September.

Employment in the construction industry decreased by 27,000 in October, following an increase of 11,000 in September (as revised). Since April, there has been no net growth in construction employment. Special trades lost 30,000 jobs in October, with electrical work accounting for a large part of the monthly decline.

Overall employment in the services industry was little changed (+18,000) over the month. Employment in business services fell sharply (-44,000), particularly in the help supply component (-56,000), which provides workers to other businesses on an as-needed basis. In contrast, health services continued to add jobs, with a gain of 20,000 in October, and there was an increase of 7,000 jobs in legal services. Over the month, employment also advanced in hotels and lodging places (16,000), offsetting an identical loss over the prior 2 months combined.

Finance, insurance, and real estate added 34,000 jobs in October. After little change in the first half of the year, the industry has added 70,000 jobs since June. Spurred by the lowest interest rates in decades, employment growth continued in mortgage banks and brokerages; the industry added 17,000 jobs in October. Employment also rose in real estate. Since June, that in- dustry has added 33,000 jobs.

The federal government added workers for the fifth month in a row, as hiring continued for the Transportation Security Administration.

Employment in transportation was essentially unchanged over the month. Workers involved in the labor dispute at West Coast ports were back at work during the survey reference period. Thus, that dispute had no direct impact on October's employment estimates.

Weekly Hours (Establishment Survey Data)

The average workweek for production or nonsupervisory workers on private nonfarm payrolls edged down by 0.1 hour in October to 34.1 hours, seasonally adjusted. The manufacturing workweek declined by 0.2 hour to 40.7 hours, and factory overtime was unchanged at 4.1 hours. (See table B-2.)

The index of aggregate weekly hours of production or nonsupervisory workers on private nonfarm payrolls was down by 0.4 percent in October to 147.8 (1982=100), seasonally adjusted. The manufacturing index was down by 0.9 percent over the month to 91.3. (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 3 cents in October to $14.89, seasonally ad- justed. Average weekly earnings edged down by 0.1 percent over the month to $507.75. Over the year, average hourly earnings rose by 3.0 percent and average weekly earnings were up by 3.3 percent. (See table B-3.)

Upcoming Changes to Household and National Nonfarm Payroll Data Series

Household Data Series

Effective with the release of January 2003 data, several changes to the Current Population Survey (CPS) will affect estimates contained in the Employment Situation news release:

--Population controls that reflect the results of Census 2000 will be used in the monthly CPS estimation process. In addition, CPS data series from January 2000 through December 2002 will be revised to reflect the introduction of the Census 2000-based population controls.

--The questions on race and Hispanic origin in the CPS will be modified to comply with the new standards for federal statistical agencies. A major change under those standards is that respondents may select more than one race when answering the survey. Respondents will continue to be asked a separate question to determine if they are Hispanic. The Employment Situation news release will present data for persons who report they are white and no other race, black or African American and no other race, and Asian and no other race. Data will continue to be presented for Hispanics separately.

--The CPS will adopt the Census industry and occupation classification systems derived from the 2002 North American Industry Classification System and the 2000 Standard Occupational Classification system. These new classification systems represent complete breaks in the time series for occupation and industry data. As a result, seasonally adjusted oc- cupation and industry estimates from the household survey will not be presented until sufficient time series become available for seasonal ad- justment.

--The CPS program will begin using the X-12 ARIMA software for seasonal adjustment of time series data. Because of the other revisions being introduced with the January data, the annual revision of 5 years of seasonally adjusted data that typically occurs with the release of data for December will be delayed until the release of data for January.

Questions about upcoming changes to the CPS data series can be directed to the Division of Labor Force Statistics at 202-691-6378.

National Nonfarm Payroll Data Series

NAICS conversion. The nonfarm payroll series, produced from the Current Employment Statistics (CES) program, will be converted from the 1987 Standard Industrial Classification (SIC) basis to the 2002 North American Industry Classification System (NAICS) basis with the June 6, 2003, release of May 2003 estimates. The NAICS conversion involves major definitional changes to many of the currently published SIC-based series. After the conversion to NAICS, SIC-based series will no longer be produced or published. Historical time series will be reconstructed as part of the NAICS conversion process. All published series will have a NAICS-based history extending back to at least January 1990. For total nonfarm and other high-level aggregates, NAICS history will begin in January 1939, the current starting date for these series. For more detailed series, the starting date will vary depending on the scope of the definitional changes between SIC and NAICS. The NAICS-based reconstruction effort will cover all CES published data types: all employees, women workers, production workers, average weekly hours, average hourly earnings, and derivative series (for example, indexes of aggregate weekly hours).

Completion of the CES sample redesign. June 6, 2003, also will mark the completion of the CES sample redesign phase-in. The redesign converts the CES from a quota-based sample to a probability-based sample. In June 2003, the services industries will be converted to the new sample design; all other private sector industries have already been converted. The final stage of sample redesign phase-in may result in level shifts for average weekly hours, average hourly earnings, production worker, and women worker series. New levels for these series are being recomputed from the NAICS- based probability sample.

Concurrent seasonal adjustment. Also beginning in June 2003, the CES program will convert to concurrent seasonal adjustment, which uses all available monthly estimates, including those for the current month, in developing seasonal factors. Currently, the CES program projects seasonal factors twice a year. With the introduction of concurrent seasonal adjust- ment, BLS will no longer publish seasonal factors for CES national estimates.

Change to federal government series. Beginning in June 2003, the CES series for federal government employment will be revised slightly in scope and definition due to a change in source data and estimation methods. The current national series is an end-of-month federal employee count produced by the Office of Personnel Management, and it excludes some workers, mostly employees who work in Department of Defense-owned establishments such as military base commissaries. The CES national series will include these workers. Also, federal government employment will be estimated from a sample of federal establishments, will be benchmarked annually to counts from unemployment insurance tax records, and will reflect employee counts as of the pay period including the 12th of the month, consistent with other CES industry series. The historical time series for federal government employment will be revised to reflect these changes.

Further information on upcoming changes to CES data series is available through the BLS public database on the Internet, via the CES homepage at http://www.bls.gov/ces/, or by calling 202-691-6555.