April 2003 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.

The unemployment rate rose to 6.0 percent in April, and nonfarm payroll employment edged down by 48,000, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. In April, job losses continued in manufacturing, some travel-related industries, and department stores.

Unemployment (Household Survey Data)

The number of unemployed persons increased to 8.8 million in April, and the unemployment rate rose from 5.8 to 6.0 percent. The unemployment rate has ranged from 5.6 to 6.0 percent since November 2001. The unemployment rate for adult men increased by 0.3 percentage point to 5.6 percent in April. Jobless rates for adult women (5.1 percent), teenagers (18.0 percent), whites (5.2 percent), blacks or African Americans (10.9 percent), and Hispanics or Latinos (7.5 percent) showed little or no change. The unemployment rate for Asians was 5.8 percent, not seasonally adjusted. (See tables A-1, A-2, and A-3.)

Total Employment and the Labor Force (Household Survey Data)

Total employment, as measured by the household survey, edged up to 137.7 million in April; the employment-population ratio was essentially unchanged at 62.4 percent. The civilian labor force increased by 680,000 over the month to 146.5 million, after seasonal adjustment. The labor force participation rate rose by 0.2 percentage point to 66.4 percent, 0.7 percentage point below the rate at the start of the recession. (See table A-1.)

In April, 4.8 million persons were working part time even though they would have preferred a full-time schedule. The number of such workers increased by about 600,000 over the year. (See table A-5.)

Persons Not in the Labor Force (Household Survey Data)

In April, 1.4 million persons were marginally attached to the labor force, the same as a year earlier. These individuals wanted and were available to work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed, however, because they did not actively search for work in the 4 weeks preceding the survey. There were 437,000 discouraged workers in April, up from 320,000 in April 2002. 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-13.)

Industry Payroll Employment (Establishment Survey Data)

Total nonfarm payroll employment edged down by 48,000 in April to 130.3 million, seasonally adjusted. This followed 2 months of job losses totaling 477,000 (as revised). Over the month, employment declined sharply in manu-

facturing, department stores, and three travel-related industries--amusements and recreation, hotels, and air transportation. (See table B-1.)

Manufacturing job losses totaled 95,000 in April, more than twice the average monthly decline for the prior 12 months (-40,000). Motor vehicles and equipment (-23,000) accounted for about one-quarter of the April decline in factory employment. This industry has lost 150,000 jobs since its most recent employment peak in June 2000. In April, job declines in a number of other manufacturing industries also exceeded their prior 12-month averages. Among these industries were lumber, furniture, fabricated metals, textiles, apparel, and paper. Employment continued to fall in electronic and electri- cal equipment.

Several travel-related industries continued to lose jobs in April. Employment in amusement and recreation services and in hotels decreased by 41,000 and 20,000, respectively, on a seasonally adjusted basis. Employment also continued to decline in air transportation, an industry that has lost 177,000 jobs since its employment peak in January 2001. Recent weakness has been concentrated in the passenger component of air transportation.

Overall employment in the services industry was little changed in April following 2 months of declines. The job losses in hotels and amusements were offset by job gains in other services industries. Employment increased over the month in legal services, engineering and management services, agri- cultural services, and health services. Employment growth in health services has slowed this year, with average monthly job gains thus far in 2003 about half the average for 2002.

Construction employment edged up in April (18,000), with most of the gains among general building contractors (13,000). General building contractors have added 39,000 jobs since employment reached a recent low point in July 2002. Residential building contractors have accounted for all of that growth.

Within finance, mortgage banking employment was essentially flat for the second month in a row. From January 2001 to February 2003, this industry added 123,000 workers, accounting for all the net growth in the finance industry.

Employment in retail trade was little changed in April, following de- clines in the prior 2 months. Department stores lost 34,000 jobs over the month. These losses were partially offset by job gains in eating and drinking places (28,000).

In government, employment in local education rose by 28,000 in April, more than offsetting a loss of 23,000 jobs (as revised) in the previous 2 months. Employment elsewhere in government was little changed over the month.

Weekly Hours (Establishment Survey Data)

The average workweek for production or nonsupervisory workers on private nonfarm payrolls declined by 0.3 hour in April to 34.0 hours, seasonally ad- justed. The manufacturing workweek also declined by 0.3 hour to 40.5 hours. Manufacturing overtime was down 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 fell by 0.7 percent in April to 146.6 (1982=100), seasonally adjusted. The manufacturing index fell by 1.3 per- cent to 88.8 in April and has declined by 4.4 percent in the past 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 2 cents in April to $15.11, seasonally adjusted. Reflecting the decline in weekly hours, average weekly earnings decreased by 0.7 percent to $513.74. Over the year, average hourly earnings increased by 3.1 percent and average weekly earnings grew by 2.5 percent. (See table B-3.)

Revisions to the Establishment Survey Data in June 2003

With the release of May data on June 6, BLS will introduce sev- eral major changes to the establishment survey, which are de- scribed below. In addition, the establishment-based series on non- farm payroll employment, hours, and earnings will reflect the an- nual benchmark adjustments for March 2002 and updated seasonal ad- justment factors.

NAICS conversion. All nonfarm payroll series, produced from the Current Employment Statistics (CES) program, will be converted from the 1987 Standard Industrial Classification (SIC) system to the 2002 North American Industry Classification System (NAICS) with the 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 publish- ed 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 deriva- tive 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 already have been converted. The final stage of the 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 introduc- tion of concurrent seasonal adjustment, 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 starting in June. 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.