Advance copies of this statement are made available to the 

press under lock-up conditions with the explicit 

understanding that the data are embargoed until 8:30 a.m. 

Eastern Standard Time.

Statement of

Kathleen P. Utgoff

Commissioner

Bureau of Labor Statistics

Friday, January 10, 2003

Nonfarm payroll employment declined by 101,000 in 

December, following a loss of 88,000 jobs in November (as 

revised). The unemployment rate held at 6.0 percent, after 

increasing in November. Despite modest growth in the 

spring and summer of 2002, payroll employment showed a net 

loss of 181,000 over the year.

The recent weakness partly reflects steeper job losses 

in manufacturing. In December, employment in the nation’s 

factories declined by 65,000. Job losses in the industry 

deepened in recent months following more moderate declines 

in the spring and early summer. The bulk of the employment 

reductions in manufacturing have been in durable goods 

production, notably in the electrical equipment, fabricated 

metals, industrial machinery, and transportation equipment 
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industries. Nondurable goods industries, however, have not 

been immune to job loss. In December, there were sizable 

job losses in rubber and plastics and in printing and 

publishing. Over the year, overall manufacturing 

employment was down by nearly 600,000. 

The manufacturing workweek increased by 0.3 hour to 

40.9 hours in December, and factory overtime rose by 0.2 

hour to 4.2 hours; both figures are about in line with the 

levels that prevailed for most of 2002.

There was a particularly large drop in retail trade 

employment in December (-104,000); many retailers hired 

fewer workers than usual for the month. The largest 

decline occurred in eating and drinking places, but there 

also were sizable job losses in food stores, auto 

dealerships, general merchandise stores, and miscellaneous 

retailers (such as toy stores). Over the year, employment 

in retail trade fell by 173,000. At the wholesale trade 

level, employment continued to drift down in December and 

declined by 65,000 over the year; these job losses occurred 

among distributors of durable goods. 

Other industries ending the year with substantial job 

losses included the transportation industry, where 

employment fell by 23,000 in December, mostly in air 

transportation. Employment in communications also 
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continued to trend downward over the month. In recent 

months, the rate of job loss in this industry has slowed, 

but, for the year as a whole, the communications industry 

lost 100,000 jobs. 

In December, job losses were partially offset by job 

growth in a few areas of the economy. The services 

industry added 73,000 jobs over the month and nearly 

600,000 jobs over the year. In December, there was a large 

gain in amusement and recreation services (+28,000) and in 

hotels and other lodging places (+16,000). Health services 

continued to add jobs (+10,000), albeit at about half its 

average monthly pace for the past year. Within business 

services, there was a job gain of 19,000 in help supply 

services, on the heels of three consecutive monthly 

declines.

In the finance industry, mortgage bankers continued to 

bring on workers to cope with continued high levels of 

refinancing activity and the ongoing strength in the 

housing market. Real estate employment continued to trend 

upward, also boosted by the high volume of home sales. 

Together, these two industries added 82,000 jobs in 2002. 

Construction employment was little changed in December and 

has held at about 6.5 million since April 2002. The 
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industry continues to be supported by robust homebuilding 

activity.

Government employment changed little over the month 

but expanded by 257,000 over the year, compared with an 

increase of 463,000 in 2001. Over the past year, more than 

two-thirds of the growth was in local government with much 

of the remainder attributable to hiring for the Federal 

Government’s Transportation Security Administration. 

Average hourly earnings of production or 

nonsupervisory workers in the private sector rose by 5 

cents to $14.98 in December. Over the year, hourly 

earnings increased by 3.0 percent. 

Moving on to the data from our survey of households, 

the unemployment rate held at 6.0 percent in December and 

the number of unemployed persons was essentially unchanged 

at 8.6 million. The jobless rate for adult women edged up 

over the month, but the rates for other major demographic 

groups were little changed. The number of persons jobless 

for 27 weeks or longer continued to trend upward; at 1.9 

million in December, the ranks of the very long-term 

unemployed were up by 741,000 over the year. Total 

employment, as measured by the household survey, edged down 

in December, and the employment-to-population ratio 

declined to 62.3 percent. 
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In summary, data from our monthly establishment and 

household surveys suggest that the labor market weakened 

somewhat as the year 2002 came to a close. Nonfarm payroll 

employment declined in December for the second month in a 

row, and the jobless rate held at 6.0 percent, after 

increasing in November. In December, sizable job losses 

occurred in manufacturing and retail trade, more than 

offsetting job growth that was confined largely to services 

and industries that benefit from low mortgage interest 

rates and a robust housing market.