U.S. labor market in 2001: Economy enters a recession

Monthly Labor Review

Volumn 125, Issue 2, 2002, Pages 3-33

  Langdon, David S ^a   McMenamin, Terence M ^b   Krolik, Thomas J ^c  

^a Div of Current Employment Stat   (United States)

^b Division of Labor Force Statistics

^c BUREAU OF LABOR STATISTICS   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0242631954     PISSN: 00981818     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (98)

1. Recessions are determined by the National Bureau of Economic Research. See details at http://www.nber.org/cycles/november2001/ recessnov.html (visited January 2002).
2. On September 11, 2001, terrorists attacked three locations in the United States. Terrorist pilots hijacked commercial jetliners and crashed them into each of the twin towers of the World Trade Center in New York City, and into the Pentagon, in Arlington, Virginia. The hijacking attempt of a fourth jetliner was aborted in a field in Pennsylvania.
3. The Federal Reserve publishes estimates of industrial production, which are available online at http://www.federalreserve.gov/releases/ G17/. The Census Bureau produces data on manufacturing inventories and publishes them online at http://www.census.gov/indicator/www/ m3/index.html (visited January 2002).
4. Car and light truck inventory data are produced by the Automotive News Data Center. Data are available on a subscription basis.
5. Karen Lundegaard, "Delphi Automotive to Trim Work Force by 5%," Wall Street Journal, Mar. 30, 2001; Rhoda Miel, "Despite record auto sales, industry cuts jobs," Automotive News, Nov. 19, 2001; Amy Wilson, "Suppliers strain to make a profit," Automotive News, Oct. 15, 2001.
6. Karen Lundegaard, "Delphi Automotive to Trim Work Force by 5%," Wall Street Journal, Mar. 30, 2001; Rhoda Miel, "Despite record auto sales, industry cuts jobs," Automotive News, Nov. 19, 2001; Amy Wilson, "Suppliers strain to make a profit," Automotive News, Oct. 15, 2001.
7. Karen Lundegaard, "Delphi Automotive to Trim Work Force by 5%," Wall Street Journal, Mar. 30, 2001; Rhoda Miel, "Despite record auto sales, industry cuts jobs," Automotive News, Nov. 19, 2001; Amy Wilson, "Suppliers strain to make a profit," Automotive News, Oct. 15, 2001.
8. Auto-related manufacturing industries include automotive and apparel trimmings (SIC 2396); flat glass (SIC 3211); automobile stampings (SIC 3465); carburetors, pistons, rings, valves (SIC 3592); vehicular lighting equipment (SIC 3647); engine electrical equipment (SIC 3694).
9. The twelve European Union member states initially participating in the Euro are Austria, Belgium, France, Finland, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. For more information, see the European Central Bank's Euro information website at http://www.euro.ecb.int (visited February 2002.) Overall exchange rates as measured by the Federal Reserve's price-adjusted broad dollar index, available online at http://www.federalreserve.gov/ releases/H10/Summary (visited January 2002). Also, see "The greenback's charm," The Economist, July 14, 2001, pp. 67-68.
10. The twelve European Union member states initially participating in the Euro are Austria, Belgium, France, Finland, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. For more information, see the European Central Bank's Euro information website at http://www.euro.ecb.int (visited February 2002.) Overall exchange rates as measured by the Federal Reserve's price-adjusted broad dollar index, available online at http://www.federalreserve.gov/ releases/H10/Summary (visited January 2002). Also, see "The greenback's charm," The Economist, July 14, 2001, pp. 67-68.
11. Steel prices as measured by the commodity Producer Price Index for Iron and Steel, available online at http://www.bls.gov/ppi.
12. "Smeltdown: steel producers," The Economist, Oct. 20, 2001, pp. 62-65.
13. The review is documented at http://www.usitc.gov/steel (visited January 2002).
14. Caroline Miller, "Big paper cuts," Printing Impressions, June 2001.
15. Trade data by SIC is available from the U.S. International Trade Commission's interactive tariff and trade dataweb, http:// dataweb.usitc.gov.
16. "Media companies: sucked into quicksand," The Economist, Oct. 27, 2001, pp. 59-60.
17. Data on before tax profits from National Income and Product Accounts produced by the U.S. Bureau of Economic Analysis http:// www.bea.doc.gov (visited January 2002).
18. "Business: The jobs challenge," The Economist, July 14, 2001, pp. 56-57; "Business: Where did all the money go?" The Economist, June 23, 2001, pp. 55-56.
19. "Business: The jobs challenge," The Economist, July 14, 2001, pp. 56-57; "Business: Where did all the money go?" The Economist, June 23, 2001, pp. 55-56.
20. Data on shipments are produced by the U.S. Census Bureau at http://www.census.gov/indicator/www/m3/index.html (visited January 2002). Data on exports by SIC comes from the U.S. International Trade Commissions' dataweb, http://dataweb.usitc.gov (visited January 2002).
21. Together Taiwan and South Korea accounted for 31.4 percent of total special industrial machinery exports in 2000.
22. These industries are computers and office equipment (SIC 357), communications equipment (SIC 366), and electronic components and accessories (SIC 367), which is principally semiconductor manufacturing. New orders for information technology goods are produced by the Census Bureau.
23. Jerry Knight, "Telecoms are Hurting and Their Suppliers Feel the Pain," The Washington Post, Oct. 30, 2000.
24. "More time with the family," The Economist, Apr. 28, 2001, pp. 78-79.
25. See, for example, the August 2001 Federal Reserve Beige Book. It is published online at http://www.federalreserve.gov/FOMC/ BeigeBook/2001/ (visited January 2002).
26. Jennifer R. Martel and David S. Langdon, "The job market in 2001," Monthly Labor Review, February 2001, pp. 3-30.
27. Truck tonnage data is published by the American Trucking Association, online at http://www.truckline.com (visited January 2002).
28. Data from input-output tables produced by BLS Employment Projections Program, available online at http://www.bls.gov/emp/ empind3.htm (visited January 2002).
29. Marcelo Estevao and Saul Lach estimated that the temporary help workers in the manufacturing workforce rose from approximately 1 percent in 1990 to nearly 4 percent in 1997, with high-tech industries (defined as SIC 35 and SIC 36, excluding SIC 363) reaching nearly 6 percent. Marcelo Estevao and Saul Lach, "The Evolution of the Demand for Temporary Help Supply Employment in the United States," NBER working paper, December 1999. Also see "Just-in-time inventories and labor: a study of two industries, 1990-98," Chapter 1, 1999 Report on the American Workforce (Washington, Bureau of Labor Statistics).
30. Marcelo Estevao and Saul Lach estimated that the temporary help workers in the manufacturing workforce rose from approximately 1 percent in 1990 to nearly 4 percent in 1997, with high-tech industries (defined as SIC 35 and SIC 36, excluding SIC 363) reaching nearly 6 percent. Marcelo Estevao and Saul Lach, "The Evolution of the Demand for Temporary Help Supply Employment in the United States," NBER working paper, December 1999. Also see "Just-in-time inventories and labor: a study of two industries, 1990-98," Chapter 1, 1999 Report on the American Workforce (Washington, Bureau of Labor Statistics).
31. Comparison of Personnel Supply (SIC 736) with all 2-digit industries.
32. Data are from the input-output tables produced by BLS Employment Projections program.
33. Ibid.
34. Construction-related manufacturing industries include various 4-digit industries within lumber products; stone, clay, and glass products; fabricated metals; rubber and other plastic products; and chemicals.
35. See the archived Weekly Weather and Crop Bulletins prepared by the U.S. Department of Agriculture, available online at http:// www.usda.gov/oce/waob/jawf/wwcb.html (visited February 2002).
36. Construction activity is measured by its value put in place. These data are produced by the U.S. Census Bureau and are available online at http://www.census.gov/const/www/c30index.html (visited January 2002).
37. Debra K. Rubin, and others, "TEA-21: Road and Rail Funding's New Stake," Engineering News Record, Aug. 6, 2001, pp. 32-37. Review the FY 2000 data; FY 2001, http://www.fhwa.dot.gov/tea21/ tablell_part4.htm (visited January 2002).
38. The value of construction put-in-place statistics are produced by the U.S. Census Bureau and are available online at http:// www.census.gov/const/www/c30index.html (visited January 2002).
39. Ibid.
40. Monthly mortgage rates are published by the Federal Reserve online at http://www.federalreserve.gov/releases/G13/ (visited January 2002). The Conference Board produces the Index of consumer confidence and published it monthly at http://www.conferenceboard.org (visited January 2002).
41. Affordability as measured the National Association of Realtors' housing affordability indices, available online at http://nar.realtor.org (visited February 2002).
42. See, for example, "La-Z-Boy Profit Falls 80%," New York Times (Reuters), Aug. 15, 2001.
43. Kim Kennedy, "Furniture industry drags despite strong housing," Facilities Design & Management, Aug. 2001. Mary Ellen Lloyd, "Furniture sellers begin to rethink strategy," Wall Street Journal, Sept. 11, 2000. Leslie Kaufman, "Bankruptcies defy growth in furniture," New York Times, Aug. 18, 2000.
44. Kim Kennedy, "Furniture industry drags despite strong housing," Facilities Design & Management, Aug. 2001. Mary Ellen Lloyd, "Furniture sellers begin to rethink strategy," Wall Street Journal, Sept. 11, 2000. Leslie Kaufman, "Bankruptcies defy growth in furniture," New York Times, Aug. 18, 2000.
45. Kim Kennedy, "Furniture industry drags despite strong housing," Facilities Design & Management, Aug. 2001. Mary Ellen Lloyd, "Furniture sellers begin to rethink strategy," Wall Street Journal, Sept. 11, 2000. Leslie Kaufman, "Bankruptcies defy growth in furniture," New York Times, Aug. 18, 2000.
46. Year-over-year percent change of the mortgage refinancing index published by the Mortgage Bankers Association of America, http:// www.mbaa.org (visited January 2002).
47. Jonathan Fuerbringer, "During a bear market, there's no place like home," New York Times, Aug. 16, 2001. Stephane Fitch and Brandon Copple, "What if housing crashed?" Forbes, Sept. 3, 2001, pp. 76-80.
48. Jonathan Fuerbringer, "During a bear market, there's no place like home," New York Times, Aug. 16, 2001. Stephane Fitch and Brandon Copple, "What if housing crashed?" Forbes, Sept. 3, 2001, pp. 76-80.
49. The comparisons are based on preliminary December retail sales estimates, which are produced by the U.S. Census Bureau, and are available online at http://www.census.gov/econ/www/retmenu.html (visited February 2002). The industry definitions follow the 1997 North American Industrial Classification System.
50. Ibid.
51. "Nightmare on Fifth Avenue: American retailers," The Economist, Oct. 6, 2001, pp. 58-61. Martha McNeil Hamilton, "Retail sales slowed in September; some chains hit hard; discounters post gains," The Washington Post, Oct. 12, 2001.
52. "Nightmare on Fifth Avenue: American retailers," The Economist, Oct. 6, 2001, pp. 58-61. Martha McNeil Hamilton, "Retail sales slowed in September; some chains hit hard; discounters post gains," The Washington Post, Oct. 12, 2001.
53. Devon Spurgeon, "Albertson's to Cut Staff by 15% to 20%, Close or Sell 165 Underperforming Stores," Wall Street Journal, July 18, 2001.
54. Tom Weir, "Retail overstock," Supermarket Business, Oct. 15, 2001, pp. 1, 6, and 8.
55. Figures from 2001 Auto Data, published by the National Automobile Dealers Association and available online at http:// www.nada.org/Content/NavigationMenu/MediaCenter/ NADAData/NADAData.htm (visited January 2002).
56. Sholnn Freeman, "Big Auto Makers Brace for Waves of Used Cars," Wall Street Journal, Aug. 7, 2001; Micheline Maynard, "Why Dealers are Putting a New Shine on Used Cars," New York Times, Apr. 15, 2001.
57. Sholnn Freeman, "Big Auto Makers Brace for Waves of Used Cars," Wall Street Journal, Aug. 7, 2001; Micheline Maynard, "Why Dealers are Putting a New Shine on Used Cars," New York Times, Apr. 15, 2001.
58. Michael Arndt and Williams Symonds, "Suddenly, Carriers Can't Get off the Ground," Business Week, Sept. 3, 2001, p. 36; Joan Feldman; "The going gets tough," Air Transport World, May 2001, pp. 72-75.
59. Michael Arndt and Williams Symonds, "Suddenly, Carriers Can't Get off the Ground," Business Week, Sept. 3, 2001, p. 36; Joan Feldman; "The going gets tough," Air Transport World, May 2001, pp. 72-75.
60. See, for example, the Federal Reserve Beige Book for June 2001 and August 2001, available online at http://www.federalreserve.gov/ FOMC/BeigeBook/2001/ (visited January 2002).
61. Tim O'Brien, and others, "Waterparks: Season in Review," Amusement Business, Oct. 8, 2001; "Summer summary," Amusement Business, Sept. 10, 2001, pp. 18, 20.
62. Tim O'Brien, and others, "Waterparks: Season in Review," Amusement Business, Oct. 8, 2001; "Summer summary," Amusement Business, Sept. 10, 2001, pp. 18, 20.
63. This comparison excludes the August 1997 strike in air transportation.
64. Michael Mecham, and others, "Manufacturers' Layoffs Could Reach 100,000," Aviation Week and Space Technology, Oct. 1, 2001, p. 43; "Airbus Gloomy Over Economy," Professional Engineering, Aug. 15, 2001, p. 10.
65. Michael Mecham, and others, "Manufacturers' Layoffs Could Reach 100,000," Aviation Week and Space Technology, Oct. 1, 2001, p. 43; "Airbus Gloomy Over Economy," Professional Engineering, Aug. 15, 2001, p. 10.
66. J. Lynn Lunsford, "Boeing Raises Estimated Deliveries for '01, Foresees Sharper Production Drop in '42," Wall Street Journal, Oct. 18, 2001.
67. William Goodman, "Employment in services industries affected by recessions and expansions," Monthly Labor Review, October 2001, pp. 3-11.
68. "Better late than never," Modern Healthcare, Jan. 1, 2001, p. 14.
69. See, for example, the "Frequently asked questions" section about the Producer Price Index at http://www.bls.gov/ppi/ppifaq.htm (visited January 2002).
70. The Producer Price Indices are published by BLS and are available on the Internet at http://www.bls.gov/ppi.
71. The enrollment projections are published in Chapter 3 of the U.S. Department of Education's Digest of Education Statistics, 2000, which is available online at http://nces.ed.gov/pubs2001/digest/ch3.html#1 (visited January 2002).
72. The 2001 annual average labor force participation rate of teenagers, at 50 percent, was the lowest annual rate since 1971.
73. Labor force participation among teenagers also fell sharply during the recessions of the early 1980s and 1990s. In contrast to movements in previous expansions, during the subsequent expansions of the 1980s and 1990s, teenage participation in the labor force never fully recovered to prerecession levels.
74. Persons 20 years of age and older are referred to as adults.
75. A family is defined as a group of two or more persons residing together who are related by birth, marriage, or adoption; all such persons are considered as members of one family. Families discussed in this section do not necessarily include children younger than 18. Persons 20 years of age and older are referred to as adults.
76. The family unemployment rates refer to the proportion of families with an unemployed adult.
77. For a more detailed description of this methodology, see Randy E. Ilg, "The nature of employment growth, 1989-95," Monthly Labor Review, June 1996, pp. 29-36. Following methods employed earlier by Ilg, major occupation-industry pairs (such as professionals in manufacturing) were ranked in descending order by their median weekly earnings in 1996. The categories were then divided into three groups - highest, middle, and lowest earnings - each of which accounted for approximately one-third of employment in 1996. An employment time series for each occupation-industry category from January 1996 through December 2001 was developed, and data for the job categories were sorted into the appropriate earnings groups. The monthly time-series data that were used were independently seasonally adjusted and do not sum to the total-employment figures.
78. Reentrants are persons who previously worked but were out of the labor force prior to beginning their job search. New entrants are persons who never worked before and who are entering the labor force for the first time.
79. During a recession, an increase in those unemployed more than 5 weeks naturally follows an initial increase in the newly unemployed, as those who were unemployed early into the slowdown find it increasingly difficult to find a job.
80. Numbers do not sum to 100 due to rounding.
81. For additional information, see John E. Bregger and Steven E. Haugen, "BLS introduces new range of alternative unemployment measures," Monthly Labor Review, October 1995, pp. 19-26. Two of the alternative measures, U-1 and U-2, are excluded from the analysis in this paper because they focus on duration of unemployment and reasons for unemployment; issues that have been discussed earlier. Data, as discussed in this section, are not seasonally adjusted.
82. Discouraged workers are persons not in the labor force who want and are available for a job and who have looked for work sometime in the past 12 months (or since the end of their last job if they held one within the past 12 months), but are not currently looking, because they believe there are no jobs available or there are none for which they qualify.
83. Marginally attached workers are persons 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 actively searched for work in the 4 weeks preceding the survey. Discouraged workers are a subset of marginally attached workers.
84. Part-time workers are persons working 1 to 34 hours per week.
85. See Deborah Feyerick, "Tight Labor Market Holds Risks For Economy," CNN.com, February 4, 2000, available on the Internet at http://europe.cnn.com/2000/US/02/04/labor.shortage/(visited January 2002). Also see Steve Bills, "Retailers Scramble for help," CNN.com, November 24, 2000, available on the Internet at http:// money.cnn.com/2000/11/24/people/retail_jobs/ (visited January 2002).
86. See Deborah Feyerick, "Tight Labor Market Holds Risks For Economy," CNN.com, February 4, 2000, available on the Internet at http://europe.cnn.com/2000/US/02/04/labor.shortage/(visited January 2002). Also see Steve Bills, "Retailers Scramble for help," CNN.com, November 24, 2000, available on the Internet at http:// money.cnn.com/2000/11/24/people/retail_jobs/ (visited January 2002).
87. Population growth in this section refers to growth in the civilian noninstitutional population age 16 years or older.
88. For a discussion of potential sources of labor, see Jennifer L. Martel and David S. Langdon, "The job market in 2000: slowing down as the year ended," Monthly Labor Review, February 2001, pp. 15-16.
89. The Board of Governors of the Federal Reserve System, for example, tracks changes in the pool of available workers to help evaluate labor supply conditions. One example is its "Monetary Policy Report to the Congress," February 17, 2000, available on the Internet at http:/ /www.federalreserve.gov/boarddocs/hh/2000/February/ Testimony.htm (visited February 2002).
90. Strictly comparable data on those not in the labor force, but who want a job, are not available for years prior to 1994.
91. The data in this section of the article are annual averages.
92. These data were first available in 1979.
93. The four regions and nine divisions are composed of the following entities: Northeast: New England division - Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont; Middle Atlantic division - New Jersey, New York, Pennsylvania; Midwest: East North Central division - Illinois, Indiana, Michigan, Ohio, Wisconsin; West North Central division - Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota; South: South Atlantic division - Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia; East South Central division - Alabama, Kentucky, Mississippi, Tennessee; West South Central division - Arkansas, Louisiana, Oklahoma, Texas; West: Mountain division - Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, Wyoming; Pacific division - Alaska, California, Hawaii, Oregon, Washington.
94. Monthly series for the West region, the Pacific division, and California begin in 1980. Series for other regions, divisions, and States begin in 1978.
95. Neither unemployment nor payroll employment data are available on a seasonally adjusted basis for metropolitan areas. The metropolitan area data presented here are not seasonally adjusted quarterly data, which preclude analysis of over-the-quarter changes.
96. The National Bureau of Economic Research, the official arbiter of business cycle peaks and troughs, determined that a business cycle peak was reached in July 1990. Likewise, a peak was officially recognized to have been reached in March 2001. This section investigates some of the effects of the three quarters of recession in 2001, by comparing and contrasting them with the first three quarters of the recession in the early 1990s.
97. Formerly referred to by the International Labor Organization as "visible" underemployment, time-related underemployment (as it is now known) "exists when the hours of work of an employed person are insufficient in relation to an alternative employment situation in which the person is willing and available to engage." For further discussion of this concept, see International Labour Office, "Bulletin of Labour Statistics," (February 1998-4.)
98. Due to the CPS redesign in 1994, the category "part-time for economic reasons" was redefined, effectively reducing the group of workers included. Adjustment factors were used in order to compare the results from the two relevant time periods. After adjustment, the increase in those working part time for economic reasons in the early 1990s period was slightly greater than 14 percent, while the increase in 2001 was around 31 percent. For a description of the effects of the redesign and the adjustment factors used, see Anne E. Polivka and Stephen M. Miller, "The CPS After the Redesign: Refocusing the Economic Lens," U.S. Bureau of Labor Statistics Research Papers, March 1995, pp. 32-34, available on the Internet at http://www.bls.gov/ore/ abstract/ec/ec950090.htm (visited January 2002).