Issue Date: January 19, 2004
AT 2003 CLOSE, JOBS DATA DISAPPOINT
The U.S. Bureau of Labor Statistics (BLS) data for December came as a nasty shock for those who expected that the recent sharp upturn in economic activity was an immediate precursor of healthy job growth.
The gross domestic product has been growing since the fourth quarter of 2001, and it rose at an unusually high 8.2% annual rate in the third quarter of last year. The new BLS data, however, indicate that the total number of people employed, which has been growing slowly over the past two years after a jarring decline of 2 million in 2001, ended 2003 with a 54,000 drop from November to just under 138.5 million. This figure was up by a meager 689,000 from its peak in January 2001.
Of more concern to chemists, almost all of whom are on somebody's payroll, is the number of people on nonfarm payrolls nationwide. This number rose an inconsequential 1,000 in December over November. This puny growth left it a substantial 2.4 million below the high of 132.6 million set almost three years ago in February 2001. Total private employment remains at 3 million below its high, also set in February 2001.
Even closer to home for chemists, total employment by the chemical industry--still the major source of jobs for chemists--ended 2003 at 908,000. This was down from 926,000 in December 2002 and 975,000 in December 2000. These drops came despite continued job gains in the pharmaceutical sector of the industry--from 274,000 to 301,000 over the past three years.
There have been nine economic cycles in the U.S. since World War II. For the first eight, the downturn phase, as measured by the number of people on nonfarm payrolls, averaged about 13 months. It took an average of 10 months to regain the previous high.
The ninth decline persisted for 29 months--from February 2001 to July 2003--and dropped payrolls by 2.7 million. The five months since have brought the recovery of 278,000, or only about 10%, of these jobs.
The experience of the nation's biggest-ever boom in the 1990s indicates that a robust economy boosts payrolls by an average of 200,000 workers per month. So it will be well into 2005, at the earliest, before payrolls regain their February 2001 high--an unprecedented hiatus in payroll growth of more than four years.
This being a presidential election year, there is a renewed discussion of which of BLS's surveys more truly reflects the status of the job market. Is it the estimate of total employment, which is based on interviews with 60,000 households and currently is more positive? Or is it the estimate of nonfarm payrolls, which is based on data from 400,000 employers and remains dour?
Either way, the prognosis is not encouraging. Both surveys indicate that current job creation remains far below the rate required to satisfy the demands of an ever-growing working population. And even the data from the household survey indicate that the average and median lengths of unemployment--close to 20 weeks and just over 10 weeks, respectively--are both at their highest levels in more than 50 years.
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