What's Happening in the Nation

Total nonfarm: +63,000 January 1994 Total private: +73,000

The coldest weather in 5 to 10 years hit the country from the Dakota’s southeastward through the Midwest and then eastward to the northern Atlantic Coast States during the survey reference week. This followed a week with two significant winter storms in the same area. This extreme weather took its toll on several industries, including construction, amusements and recreation, eating and drinking places, and possibly business services and engineering and management services. The weather may have depressed employment in other retail and service industries as well, especially impacting low-paid, part-time, hourly workers. This would help explain the large increase in earnings (up 8 cents) and the 0.3 gain in hours (both figures are flat for manufacturing). The good news in the January data is that durable goods manufacturing had another significant employment increase while maintaining high hours. Strength was also displayed in transportation, wholesale trade (durables), auto dealers, and health services.

The Personal Income side of GDP should be up significantly, due to gains in employment and hours combined with the large increase in earnings. Our impact on FRB’s Industrial Production Index will be moderately positive reflecting the increase in manufacturing employment and flat hours. Our contribution to the Index of Leading Economic Indicators will be zero, due to the flat manufacturing workweek. Our data will have a positive impact on the Index of Coincident Economic Indicators due to the small increase in employment along with the positive influence on personal income and industrial production.

MINING — January was a flat month for mining employment, as the industry showed a nominal decline of 2,000 jobs. With the return of striking coal miners in December, employment has returned to its pattern of slow declines. Employment is 6,000 (1.0%) below its January 1993 level, and is now 616,000 (50%) below its March 1982 peak.

COAL MINING — Coal mining employment did not change in January, after adding nearly 17,000 jobs in November and December as striking miners returned to work. Employment is still down 7,000 (6%) from January 1993.

OIL AND GAS EXTRACTION— Employment in Oil and Gas Extraction declined slightly in January, losing 1,000 jobs. The small loss was the fourth consecutive drop in this industry. After gaining 18,000 jobs (5.4%) between March 1993 and September 1993, the industry has given back half of these gains in the last four months. January’s loss was focused in Petroleum and Natural Gas (SIC 131), which declined by 1,000 jobs for its third straight drop.

CONSTRUCTION — Construction employment was virtually flat in January, declining by 3,000. Adverse weather conditions in the middle and eastern half of the country both before and during the survey week had a negative effect on employment in January. After growing by 72,000 in October and November, the construction industry has had small declines in each of the past two months. Over the past 6 months the industry has added just 67,000 jobs, 72,000 fewer than in the previous six months. For the year, the construction industry has added 191,000 jobs, or 4.7 percent, with over 85 percent of this gain coming from Special trade contractors (SIC 17) and Residential building construction (SIC 152). In January, a large gain in residential building was offset by declines in Nonresidential building contractors (SIC 154), Painting and paper hanging (SIC 172), and Roofing, siding, and sheet metal work (SIC 176).

MANUFACTURING — Manufacturing employment increased by 26,000 jobs in January, its fourth consecutive increase. All of the gain occurred in Durable goods industries which added 27,000 jobs for the month. In the Durable goods industries, Lumber (SIC 24), Fabricated metal products (SIC 34) and Transportation equipment (SIC 37) all posted impressive gains in January. Electronic and other electrical equipment (SIC 36) was the only industry to lose jobs. Employment in Non durable goods manufacturing remained relatively flat in January, losing 1,000 jobs. Small losses in Food and kindred products (SIC 20) and Chemicals and allied products (SIC 28) were offset by a gain in Rubber and plastic products (SIC 30).

TRANSPORTATION AND PUBLIC UTILITIES — TPU added 15,000 jobs in January making for the fifth consecutive gain. All of the increase was in Transportation as Communications and Public Utilities remained static in January.

WHOLESALE TRADE — Wholesale trade started off 1994 with a gain of 10,000 jobs. This gain is the fifth in a row and is almost double the average of 5,600 jobs the industry gained per month in 1993. January is a month that usually experiences a large number of layoffs, however this January we did not see as many as expected. There were, however, more Wholesalers laid off this January than there were last January. The entire gain was seen in Durables, with Nondurables meeting expectations. January’s increase brings the total number of jobs added since September to 33,000. On the whole, the industry has experienced, and continues to experience, moderate but steady growth. This growth is fueled primarily by the strength in Durable goods, with little to no help from the Nondurables sector.

RETAIL TRADE — All employment increased by 20,000 seasonally adjusted in January 1994. Employment has increased for ten consecutive months. Since employment reached a trough in December 1991, employment has increased by 702,000 or 4 percent. Eating and drinking places accounts for 67 percent of this increase. Automotive dealers and service stations and Furniture and home furnishings account for 17 and 10 percent of the increase respectively. The largest increases in January occurred in Building materials and garden supplies up 10,000, Automotive dealers and service stations up 11,000, Furniture and home furnishings up 9,000, and Misc. retail establishments up 10,000. The largest declines occurred in General merchandise stores down 15,000, Apparel and accessory stores down 9,000 and Eating and drinking places down 17,000. AWH increased by 0.2 seasonally adjusted. AHE increased by $.06 as all but one two digit industry showed increases.

FINANCE, INSURANCE, AND REAL ESTATE — FIRE, experiencing its fifth consecutive strong month, added 6,000 to payroll in January. This industry has added an average of 13,000 jobs per month for the last five months. All of the gain was in Finance that has been the strong component of FIRE since March of 1993.

SERVICES — Services gained 98,000 jobs per month in 1993 and no jobs in January 1994. Weather is believed to be the main problem. Although the worst weather came after the reference week, the weather during the reference week was none too good. After the reference week, more severe weather is likely to have reduced reported employment in establishments with two-week or longer payroll periods, which otherwise might have picked up some people later in the month. The worst industry in services, in terms of negative departure from the average rate of increase in jobs, was business services (SIC 73), which gained an average of 39,000 jobs per month in 1993 and lost 13,000 in January for a difference of 52,000. Next-worst was amusement and recreation (SIC 79) which had an average monthly gain of 1,000 in ’93 and lost 18,000 in January. Engineering and management services (SIC 87) lost 10,000 jobs in January after establishing an average gain of 4,000. Ten of the services division’s 16 two-digit SIC's were down from their average changes. Miscellaneous repair (SIC 76) had the greatest positive departure from average change, but that departure was of only 5,000.

GOVERNMENT — The government sector began 1994 with a loss of 10,000 jobs. The weakness was mainly due to a decline in Federal government employment. Government employment grew by 200,000 in 1993. The growth occurred despite a decline of 45,000 Federal government jobs.

FEDERAL GOVERNMENT — The Federal government lost 20,000 jobs in January, due to the Postal Service’s shedding of temporary jobs added in December. Despite reports of cutbacks and the subsequent retirement of nearly 50,000 postal workers in late 1992, the level of employment in the Postal Service is now 20,000 higher than it was prior to the retirements.

STATE GOVERNMENT — State government lost 3,000 jobs in January. Employment in education was unchanged. State government gained 60,000 jobs in 1993, slightly less than the number of jobs added in 1992. Last year’s increase in employment was evenly split between the non-education sector and the education sector.

LOCAL GOVERNMENT — Employment in local government grew by 13,000 this month. The education sector added 11,000 jobs. In 1993, local government employment rose by 180,000, with education responsible for two-thirds of the growth. Like State government, local government growth was slower in 1993 than it was the prior year.

Source: U.S. Department of Labor, Bureau of Labor Statistics, 1st Release.

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