BUREAU OF LABOR STATISTICS, DAILY REPORT, TUESDAY, APRIL 23, 2002: RELEASED TODAY: Labor productivity -- defined as output per hour -- rose in 2000 in more than three-fourths of the 170 industries studied by the Bureau of Labor Statistics. Output rose in 71 percent of the industries, while hours rose in 44 percent. The share of industries with productivity increases during the 1990-2000 period was even greater. From 1990 to 2000, labor productivity increased in 92 percent of the industries. Output rose in 85 percent of the industries, while hours rose in only 46 percent.
At first glance, the Labor Department's employment report for March sent a mixed message about the economy, says James C. Cooper & Kathleen Madigan writing in the "Business Outlook" feature of Business Week (April 22, page 27). Payrolls posted a moderate gain, the first of the recovery, but the unemployment rate rose after 2 months of decline. While those two data points seem contradictory, the split reflects the two sets of influences affecting the economy right now. The first group is the structural changes of the 1990s, including greater labor-market flexibility, larger productivity gains, and faster growth in real wages. The second set extends from the classic business-cycle turn-around in the long-beleaguered manufacturing sector, as businesses replenish depleted inventories. Taken together, the collection of structural and cyclical influences suggests that the economy as a whole will look much healthier in 2002 than the job markets will. Economic growth this year will be powered mainly by productivity. Hiring will pick up, but it may not be strong enough to stop the jobless rate from rising above March's 5.7 percent. But because the jobless rate remains historically low, wages should grow fast enough to keep household buying power rising. Among the structural changes: Businesses will be slow to add on costly permanent staffers, and temporary workers and variable pay will be evident. Given their desire to lift profits, companies will focus on extracting all possible productivity gains from their existing workforce. The growth of production workers' hourly earnings has slowed in the past 6 months, from 4.4 percent per year to 3.5 percent. But with inflation slowing as well, real wages are growing faster now than they were 6 months ago. An estimated 50,000 New York City workers lost their jobs in the wake of last year's terrorist attacks, but do not qualify for relief set aside for September 11 victims, according to a study released today. The report, by the United Way of New York City, highlights the dilemma facing many displaced workers who lost their livelihoods after the attacks, yet were left behind from charity aid because they did not live or work in Lower Manhattan. The report points out that 9,000 jobs were lost in the city's aviation industry, which it calls a direct effect of the attacks. However, because most airline and airport employees worked in Queens, they were not eligible for help (Associated Press, http://www.nandotimes.com/nation/story/373553p-3007474c.html). Federal officials have joined with nearly 350 college and universities to sell this year's 1.2 million college graduates on government work, writes May Deibel, Scripps Howard News Service (http://www.nandotimes.com/business/story/373281p-3003815c.html, USA Today, page 8D). In coming weeks, federal recruiters will hit college campuses to tell students that "we need new talent, new energy, new creativity to do the work of government in the 21st century," whether its in military or civil service, says Kay Coles James, head of the federal Office of Personnel Management and the government's recruiter in chief. With more than half the current federal work force of 1.8 million eligible to retire over the next 5 years, James said, the federal government needs doctors, lawyers, social workers, psychologists, CIA agents, architects, archaeologists, park rangers and foresters -- and that's just for starters. Despite the surge in patriotism and respect for government since September 11, only 1 in 6 college graduates expresses serious interest in working for the government, according to a new poll by Peter Hart and Robert Teeter. DUE OUT TOMORROW: Mass Layoffs in March 2002
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