[Accessibility Information]

 

Related BLS programs | Related articles

February  2003, Vol. 126, No.2

U.S. labor market in 2002: continued weakness

Terence M. McMenamin, Rachel Krantz, and Thomas J. Krolik

The U.S. job market remained weak in 2002, in the wake of the marked deterioration that occurred in 2001. Nonfarm employment turned toward slow growth around mid-year, but still ended up at a lower level than a year earlier. The unemployment rate edged up during the year; by yearend, it was up just slightly from its level at the close of 2001.

These labor market indicators reflected broad uncertainties facing businesses and consumers. Early in the year, factors such as an uptick in industrial production and new orders, as well as rising consumer confidence, pointed toward an improvement in economic conditions; as the year progressed, some of this initial strengthening gave way. During the second half of the year, the business climate and consumers’ attitudes were shaped by a number of events. These included heightened geopolitical concerns and weakening in the stock markets, which related in part to the revelation of accounting irregularities in several firms’ financial statements and lapses in corporate governance.¹  Concern about the outlook for substantial economic recovery persisted through yearend.

Without a clear sign that the economy had returned to sustainable growth, most employers remained reluctant to hire. Nonfarm payroll employment declined by 424,000 in the first half of the year and rose by only 100,000 in the second half; altogether, employment contracted by 0.2 percent over the year. Manufacturing remained weak, with a 3.7-percent employment decline, although the pace of job losses slowed considerably relative to 2001. Industries that are closely tied to manufacturing activity, such as wholesale trade and transportation, also remained weak. Despite low interest rates and a strong housing market, employment in construction fell by 1.4 percent; and although consumers continued to spend, retail trade employment fell by 0.8 percent. Services and government both added jobs throughout the year, as long-term demographic trends generated growth in health services and education.

This excerpt is from an article published in the February 2003 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.

Read abstract  Download full article in PDF (164K)

Footnotes
1 See "Testimony of Chairman Alan Greenspan," before the Joint Economic Committee, U.S. Congress, Nov. 13, 2002, available on the Internet at http://www.federalreserve.gov (visited Nov. 2002).

Related BLS programs

Labor Force Statistics from the Current Population Survey
Local Area Unemployment Statistics
Nonfarm Payroll Statistics from the Current Employment Statistics (National)

Related Monthly Labor Review articles