Employment in 1994

[Numbers in thousands]

Table 10. Persons not in the labor force by age, sex, race, and Hispanlc origin, 1994 annual averages

Not in the tabor force
Wanted job and searched for work In previous year!

Category Available to work now Other not
Total In the

Total Discouraged| Other tabor force

Total workers? | reasons? | to work now
Total, 16 years and older . 65,758 2,630 1,807 500 1,307 823 63,128
Percent. 100.0 100.0 100.0 100.0 100.0 100.0 100.0
16 to 24 years 16.6 39.5 35.4 28.6 37.9 48.6 157
25 to 54 years 28.5 50.2 52.0 55.6 50.6 46.1 27.6
56 years and older. 54.9 10.3 12.6 15.8 114 53 56.8
Men... 35.8 43.3 45.9 59.2 40.9 37.4 95.5
Women. ceeees : 64.2 56.7 54.1 40.8 59.1 62.6 64.5
Race and Hispanic origin

White 82.8 68.7 66.2 61.0 68.2 73.9 83.4
Black. 12.7 25.4 28.3 32.4 26.8 19.0 122
Hispanic origi 93 12.4 13.1 14.0 127 Wt 92

” Refers to persons who looked for work in the prior 12 months or since the end of their last job, if they held one in the last 12 months.

? Includes persons who did not look for work during the last 4 weeks because they believe no work is available, they could not find work, they lack
necessary schooling or training, their employer thinks they are too young or too old, and,other types of discrimination.

? Includes persons who did not look for work during the last 4 weeks for reasons such as child-care problems, family responsibilities, in school or training,
ill health or disability, and transportation problems, as well as a small number for which reason for nonparticipation was not determined.

der age 25, compared with 16 percent of the labor
force), and black (32 percent versus 11 percent).
The remaining 1.3 million persons gave other
reasons for not currently looking for work. These
were more personal in nature than the reasons
given by the discouraged group, and included ill
health or disability, transportation problems, fam-
ily responsibilities, or attendance at school. Like
discouraged workers, this group was dispropor-
tionately young or black, but, unlike the discour-
aged, the majority (3 out of 5) were women.

THE LABOR MARKET turned in a very strong per-
formance in 1994. The increase of 3.4 million in
payroll employment was the largest in 10 years.
Services and retail trade each had substantial em-
ployment gains over the year. Manufacturing em-
ployment rebounded after suffering steady job
losses for more than 4 years, and construction
posted a second straight year of strong growth.
The large employment gains were accompanied
by a steady decline in unemployment, as the job-
less rate fell from 6.6 percent in the first quarter
to 5.6 percent by year’s end. The numbers of both
unemployed persons who expected to be recalled
to their jobs and persons whose job loss was per-
manent fell over the period. ~ 0

Footnotes

AckNowepoMENt: The authors thank Stella Cromartie,
Ron L. Hetrick, Steven Hipple, and Ken Levasseur, also

16 Monthly Labor Review February 1995

economists in the Office of Employment and Unemploy-
ment Statistics, for their invaluable assistance in the prepa-
ration of this article.

) The Current Employment Statistics (ces) survey con-
ducted by the Bureau of Labor Statistics collects informa-
tion on payroll employment, hours, and earnings from more
than 390,000 nonfarm business establishments employing
about 49 million workers. The Current Population Survey
(cps), a nationwide sample survey of some 60,000 house-
holds conducted for the Bureau of Labor Statistics by the
Bureau of the Census, collects information about the demo-
graphic characteristics and employment status of the nonin-
stitutional population aged 16 and older.

Employment and unemployment data in this article are
quarterly averages, unless otherwise noted. Fourth-quarter
data from the ces are preliminary. Estimates of over-the-
year change in nonfarm payroll employment, hours, and
earnings from the ces are based on a comparison of fourth-
quarter 1993 and 1994 averages. Because of the major re-
design of the cps that became effective in January 1994,
however, household survey data in this article cover only
the first through the fourth quarters of 1994. (See box for
further explanation.)

2 The most recent recession, as officially designated by
the Bureau of Economic Research, began in July 1990 and
ended 9 months later, in March 1991.

3 These estimates are revised each year when benchmark
data for employment are available from administrative
records. The benchmark revisions to be released in June 1995
will raise the level of employment for March 1994 by about
760,000, and increase employment growth for the first quar-
ter by about 190,000. The impact on estimates of growth for
the remaining quarters of 1994 is expected to be minimal.

* For a review of the nature of job growth over the 1988-
93 period, see Employment in Perspective: Earnings and
Job Growth, Report 877 (Bureau of Labor Statistics, Au-
gust 1994).



seasonally adjusted, 1991-94
Emy
(in thousands)

Chart 1. Quarterly changes In nonfarm payroll employment and In gross domestic product (GDP),

GDP
(in percent)

GDP, constant dollars

1900

1991 1992

NOTE: Data for the fourth quarter of 1994 are preliminary.
SOURCE: Bureau of Labor Statistics and Bureau of Economic Analysis.

1 1 n 1 L L L 1 1 1 4
1993

companies to be more responsive to short-term
fluctuations in demand and still keep production
costs down. Because many of these workers are
in lower paying occupations, such as nursing
aides and construction laborers, the average
hourly wage in personnel supply services was
$8.70, which is considerably below the $11.12
average for production or nonsupervisory work-
ers in all private sector industries.”

Three other industries within business services
made the top 20 list: Computer and data pro-
cessing services is a high-paying industry that
added 105,000 jobs in 1994, while services to
buildings and miscellaneous business services,
which each grew by about 50,000 workers, pay
less than the average hourly wage. The explana-
tion for the rapid growth of these industries is
similar to that for the expansion of personnel
supply services—many of today’s employers
wish to minimize costs through use of flexible
work arrangements. However, firms in computer
services, services to buildings, and miscellaneous
business services do work for clients under con-
tract, while personnel supply agencies provide
workers to clients.

Retail trade. Eating and drinking places added
far more workers, 272,000, than any other in-

dustry except personnel supply services.® This
large, labor-intensive industry continues on a
strong growth trend year after year to meet the
demand for convenience food and restaurant
meals. The average hourly earnings in eating and
drinking places are the lowest among the 288
industries. However, it should be kept in mind
that tips are not included in the payroll reports.
Three other types of retail stores were in the
top 20. After several years of buyouts, bankrupt-
cies, reorganizations, and layoffs, department
stores made a comeback in 1994, adding 88,000
workers. Auto dealers and furniture stores also
had substantial job gains—another testament to
the importance of healthy consumer demand and
tow interest rates in the 1994 economy. Hourly earn-
ings in auto dealers were above the average for all
workers, while those in department stores and fur-
niture stores were considerably below average.

Goods-producing industries. Three industries
from the goods-producing sector made the top
20 list. Two were in construction—electrical
work and masonry, stonework, and plastering—
while only one was in manufacturing— motor
vehicles. As has already been discussed, low in-
terest rates and generally good economic condi-
tions were the primary forces behind the health

Monthly Labor Review February 1995 7



Employment in 1994

Table 5. Employment status of the civilian noninstitutional population aged 16 and older
by sex, age, race and Hispanic origin, seasonally adjusted quarterly averages, 1994
[Numbers in thousands}
1994 Change,
Characteristic 1994
1 " ny Vv 19941V
Total
Civilian labor force. . 130,711 | 130,675 | 131,050 | 131,696 905
Participation rate 66.7 66.5, 66.5 66.6
Employed... 122,090 | 122,580 | 123,207 | 124,371 2 ait
Employment-population ratio. 62.3 62.4 62.5 62.9
Agriculture : 3,364 3,382 3,393 3,509 148
Nonagricuttural industries . 118,726 | 119,198 | 119,814 | 120863 | 2,137
Unemployed ... 8,621 8,095, 7,843 7,325 | -1,296
Unemployment rate. 6.6 62 6.0 56 1.0
Men, 20 years and over
Civilian labor force... 68,767 | 66,665 | 66,824 | 67,324 587
Participation rate 76.9 76.6 76.6 76.9 0
Employed......... 62,796 63,027 | 63,288 | 64,051 1,255
Employment-population ratio 72.3 72.4 72.8 73.2 3
Agriculture........ 2,345 2,360 2,328 2,372 27
Nonagricutural industries 60,452 60,667 | 60,960 | 61,679 1,227
Unemployed ........ 3.971 3,638 3,536 3,273 -698
Unemployment rate. 5.9 55 5.3 49 ~1.0
Women, 20 years and over
Civilian labor force......... 56,492 | 56,465 | 56,771 56,887 395
Participation rate . 59.4 59.2 59.4 59.4 0
Employed... te 53,199 53.976 | 53.769 | 54,085 886
Employment-popul 55.9 56.0 56.3 56.5 6
Agriculture. 765 787 817 865 100
Nonagricultural industries . 52,434 52,589 52,952 53,220 786
Unemployed ........ 3,293 3,089 3,002 2,801 492
Unemployment rate 58 55 5.3 49 -9
Both sexes, 16 to 19 years
Civilian labor force .. 7,462 7.545 755 7,486 34
Participation rate . 52.9 53.2 52.3 52.5 -4
Employed......... 6,095 6177 6,150 6,235 140
Employment-population ratio 43.3 43.6 43.4 43,7 4
Agriculture... 254 235 248 272 18
Nonagricultural industries | 5,840 5,942 5,902 5,964 124
Unemployed ...... 1,367 1,368 1,304 1,250 107
Unemployment rate 18.2 18.4 175 16.7 “15
White
Civilian fabor force............ 110,735 | 110,720 | 111,169 | 111,696 901
Participation rate... 67.1 67.0 67.4 67.2 1
: 104,431 | 104,752 | 105,382 | 106,201 1,770
63.3 63.3 63.6 64.0
6,305, 5,968 5,777 5,434 871
Unemployment rate. 57 6.4 52 49 -8
Black
Civilian labor force... 14,470 14,499 | 14,429 | 14,589
Participation rate 63.6 63.5 63.0 63.4
Employed... 12,629 | 12,008 | 12,@30 | 13,065
Employment-population ratio - 55.5 56.1 56.0 56.8
Unemployed . 1,841 1,692 1,599 1,524
Unemployment tate. 12.7 11.7 44 10.4
Hispanic origin
Civilian labor force 11,765 17,895 | 11,985 | 12,257 492
Participation 65.7 65.9 65.9 66.8 1A
Employed. . tees 10,557 10,673 { 10,784 | 11,138 58t
Employment’ Population ra ratio’. 59.0 59.2 59.3 60.7 17
Unemployed . . 1,207 1,222 1,201 1,118 -89
Unemployment rate 10.3 10.3 10.0 91 1.2
Note: Detail for race and Hispanic-origin groups will not sum to totals because data for the “other races” group are not
Presented and Hispanics are included in both the white and black population groups.

12° Monthly Labor Review February 1995



Table 2. Continued—Employees on nonfarm payrolls by Industry, seasonally adjusted quarterly averages, 1991-94

{Un thousands}

Ind 1991 | 1992 | 1993 1998 Saas a

usiry v v v 1 a m Iv? | 4994 IVp
Holding and other investment offices 220 220 227 229 232 234 1
Insurance .... 2,182 | 2,162 | 2190 | 2,186 | 2,186 | 2180] 2175 | -15
Insurance carriers 1,489 | 1,505 | 1,527 | 1525] 11523] 11515 | 11506 | -21
Insurance agents, brokers, and service 663 657 662 661 663 665 669 6
Real estate 1,293 1,297 1,325, 1,336 1,346 1,360 1,368 43
Services’ .... 28,557 | 29,439 | 30,801 | 31,153 | 31,620 | 32,031 | 32,388 | 1,587
Agricultural services 487 493 532 $32 545 558 870 38
Hotels and other lodging places. 1,582 | 1,575 | 1,600] 1,603 | 1,614] 1,618 | 1,591 -9
Personal services .... 1,120} 1,121 | 1,197 | 1.143 | 1,133. | 1,137 | 1.135 ~2
Business services .. 5,124 | 5,468 | 6,009 | 6166] 6358] 6540] 6,713 | 704
Personnel supply services 1,513 | 1,717 | 2,067 | 2178 | 2301 | 2,394 | 2477 | 410
Auto repair, services, and parking . 882 ‘893 975 | 1,004 | 1,032 | 1,056 | 1.082] 106
Miscellaneous repair services 343 352 368 374 379 382 386 18
Motion pictures 405 407 427 443 470 492 526 | 100
‘Amusement and 1136 | 1,211 | 1,251 | 1,258 | 1,281 | 1,266 | 1,266 15
Health services asi9 | 9593 | sge72 | 8930 | 9,003} 9,088 | 9122 | 250
Hospitals .. 3,697 | 3,773 | 3,789 | 3,789 | 3,792 | 3,789 | 3,790 1
Legal services . 915 916 934 939 940 943 948 14
Educational services . 1,708 | 1,668 | 1,704 | 1,720 | 4,739 | 1,752 | 1,771 68
Social services. 1,087 | 1,998 | 2198] 2176 | 2224] 2283] 2313] 175
Museums and botanical and zoological gardens .- 70 74 7 78 79 80 80 3
Membership organizations .... - : 2,000 | 2,039 | 2,042 | 2,051 | 2,058 | 2,064 25
Engineering and management services 2,492 | 2,563 | 2,572] 2,597 | 2,624 | 2.645 82
Government . 18,712 | 18,803 | 18,919 | 19,004 | 19,087 | 19,159 | 267
Federal. 2,951 | 2,905 | 2,890 | 2.870) 2.860 | 2859 | -46
State...... 4.437 | 4507 | 4,508 | 4,535 | 4,582 | 41589 82
Education . 2.631 | 2.666 | 2.672 | 2686 | 2,698 | 2,709 43
Other State Government « 1,606 | 1,841 | 1,896 | 1,850 | 1,884] 1,880 40
Local . 11,324 11,481 11,522 11,599 11,645 W711 230
5,054 | 5,097 | 5,120] 5,151 | 5,125 | 5,177 80
6270 | 6,383 | 6402 | 6447] 6520 | 6534 | 150

of these industries. All three have very high av-
erage hourly earnings.

Other government. Local government, except
education, was among the top job gainers, a de-
velopment made possible by increased tax rev-
enues. Most of this gain was in general adminis-
tration. Because of the very large employment
base in this industry, however, the big numerical
increase represented a very low rate of growth.
Hourly earnings are not compiled for the gov-
ernment sector, but a comparison of average
weekly earnings for 1993 shows that local gov-
ernment, except education, pays slightly above
the average for all private industries.

Three more. Two of the remaining three eco-
nomically-driven industries on the top 20 list
were in the above-average wage category. Truck-
ing added 64,000 workers, as the strong economy
required the transportation of growing factory
shipments as well as swelling imports. Motion
picture Production and services also had large
employment gains, as consumers put out more
money for entertainment as well as other pur-

chases. Finally, automotive repair shops, with
earnings that are just short of the average for all
Private industries, continued a steady growth trend.

Demographically-driven industries

Five of the top twenty industries are little influ-
enced by business cycles but respond more to
demographics and other noneconomic influ-
ences. Social services and health services each
account for two of these industries, and the other
is public education.

Education. Within government, 156,000 jobs
were added in local education (primarily grades
K-12) to serve swelling enrollments without in-
creasing the ratio of students to staff.? The 1993
average weekly earnings for primary and second-
ary schools in the local government sector were
slightly below the average for private industry.

Social services. Among social services, child
day care and residential care (such as orphan-
ages and other facilities for persons who require
Personal assistance but not nursing care) grew

Monthly Labor Review February 1995 9



Employment in 1994

Table 2. Employees on nonfarm payrolls by industry, seasonally adjusted quarterly averages, 1991-94

{In thousands}

Indust 1991 1992 1993 1994 change,

v v wv w ' " w we | 1904 1ve
Total nonfarm 108,154 | 109,128 } 111,363 | 111,976 | 112,995 | 113,908 | 114.759 3,396
Total private 89,677 | 90,416 | 92,470 | 93,057 | 93,990 | 94.821 | 95,590 | 3,129
Goods-producing . 23,482 23,189 23,275 23,350 23,534 23,634 23.804 529
Mining! . 663 622 609 612 605, 603 597 -12
Metal mining | . 54 52 50 50 50 51 52 1
Oil and gas ‘extraction vee 376 345. 354 MB 340 337 332 22
Nonmetallic minerals, except fuels . 102 102 101 101 101 101 101 oO
Construction 4,536 4,507 4,724 4,765 4,909 4,953 5,021 297
General building contractors . 1,099 1,079 1,130 1,142 1,163, 1,166 1,194 64
Heavy construction, except building - 713 709 710 7m 724 728 719 8
Special trade contractors 2724} 2,719 | 2863] 2013) 3022 | 3058] 3,108] 225
Manufacturing . 18,283, 18,061 17,942 17,973 18,020 18,079 18,186 244
Durable goods ... . 10,445 10,231 10,143 10,185 10,229 10,282 10,371 228
Lumber and wood products. . 671 692 712 723 727 734 741 29
Furniture and fixtures .... 475 479 487 492 495, 497 499 12
Stone, clay, and glass products . si7| sta] 517] 522 | 529 | 531 | 536 | 19
Primary metal industries ....... 710 687 677 680, 680 687 698 2
Blast furnaces and basic steel product. 257 245 237 236 232 233 235 3
Fabricated metal products . 1,328 1,335 1,346 1,358, 1,371 1,389, 54
Industrial machinery and equi ment. . 1,925 1,916 1,925 1,942 1,950 1,962 46
Electronic and other electrical equipment 1,519 1,521 1,529 1,544 1,560 1,575 54
Transportation equipment 1,800 1,727 1,726 1,720 1,723 1,743, 16
Motor vehicles and equipment . 820 845, 870 871 889 912 67
Aircraft and parts. . 586 615 496 483 472 465 -50
Instruments and related products | 916 877 868 857 849 846 31
Miscellaneous manufacturing industi 371 374 374 376 379 383 8
Nondurable goods.......... . 7,830 7,799 7,788 7,791 7,797 7,815 16
Food and kindred products 1,666 1,675 1,670 1,666 1,665 1,668 6
Tobacco products 45 42 41 40 39 we 4
Textile mill products . 675 671 673 672 671 673 2
Apparel and other textile products. 999 965, 955 957 956 950, 15
Paper and allied products . 687 693 685. 685 684 682 685 oO
Printing and publishing. . 1,518 1,508 1,514 1,519 1,525, 1,533, 1,539, 25
Chemicals and allied products . 1,080 1,084 1,071 1,062 1,056 1,051 1,048 -23
Petroleum and coal products oe 161 154 150 148 148 148 149 -1
Rubber and miscellaneous: Plastics products . 867 887 908 920 930 938 951 43
Leather and leather products . 120 117 116 115 114 113 4
Service-producing 85,938 88,088 88,626 89,461 90,274 90,955 2,867
‘Transportation and public ut ities. §,733 5,797 5,804 5,817 5,863 5,885 88
Transportation . S517 3,610 3,624 3,641 3,691 3,709 99
Railroad transportation. 253 247 248 245, 244 244 3
Local and interurban passenger transit . 367 368 374 380 386 393 393 19
Trucking and warehousing. 1,609 1,622 1,710 1,712 1,727 1,772 1,783 73
Water transportation 181 170 168 166 167 167 165. -1
‘Transportation by air. . 725 732, 737 739 733 729 733 -4
Pipelines, except natural gas 19 19 18 18 18 18 18 0
‘Transportation services . 344 353 358 361 364 369 375 17
Communications and public utilities . 2,252 2,216 2,187 2,180 2,176 2,172 2,175 NW
Communications 1,290 1,267 1,249 1,249 1,252 1,257, 262 13
Electric, gas, and sanitary services. 962 949 937 932 924 915 913 24
Wholesale trade. 6,062 | 5,959] 5,971| 6002] 6038| 6076] 6116] 146
Durable goods 3,502 3416 3,414 3,429 3,450 3,469 3,493 79
Nondurable goods 2,560 2,544 2,557 2,673 2,588 2,606 2,623 67
Retail trade .... 19,232 18,460 19,867 19,972 20,190 20,420 20,617 750
Building materials and garden supplies . 746 762 798 813 833, 645 859 61
General merchandise stores . . 2,423 2,463 2,450 2,429 2,441 2,472 2,521 71
Food storas . . 3,190 3,179 3,215 3,223 3,234 3,250 3,266 52
Automotive dealers: and service stations 1,971 1,973 2,061 2,101 2,138 2,158 2,193 132
Apparel and accessory stores . . oo 4,141 1,130 4,149 4,149 4,145, 1,150 1,154 5
Furniture and home furnishings stores. . . 800 803 848 861 880 905 935 87
Eating and drinking places .. . eee 6,493 6,699 6,879 6,924 7,024 7115, 7,156 277
Miscellaneous retail establishments 2,468 2,451 2,467 2,472 2,494 2,525 2,533 66
Finance, insurance, and real estate 6,600 6,635 6,760 6,776 6,792 6,797 6,790 30
Finance 3,155 3,176 3,245 3,254 3,260 3,257 3,247 2
Depository institutions 2,128 2,085 2,068 2,050 2,041 2,039 2,036 -32
Nondepository institutions . . 384 421 467 482 486 476 463 -4
Security and commodity brokers . 423 449 483 492 502 507 510 28

See footnotes at end of table

8 Monthly Labor Review February 1995

[oy



Table 4. Employment and average hourly earnings in the 20 industries adding the most
Jobs in 1994, fourth-quarter averages, not seasonally adjusted
[Numbers in thousands}
Employees Change” ‘Average
Ranking Industry sic 1993 | 1994 noury
Vv ive | Number | Percent tou
1 Personnel supply services ........... 736 | 2,140.8 } 2,564.3 | 423.6 19.8 | $8.70
2 | Eating and drinking places . 88 | 6,840.8 | 7,112.7 | 271.9 40 5.45
3 | Local government education 6,687.1 | 6,843.1 | 156.0 23 )
4 | Computer and data processing
services ...... 737 | 930.3 | 1,035.5 | 105.3 113 | 16.98
5 | Department stores .. 531 | 2,244.2 | 2,992.1 | 87.9 39 7.44
6 —_| Motion picture production and
services . . wee vai} 1672] 2527] 855 sia | 19.73
7 | Local government, except education .. ... | 5019.7 | 51049 | 85.2 7 ®
8 | Motor vehicles and equipment........ 371] 948.7 | 915.9) 672 7.9 | 16.92
Home health care services........... 808 | 490.0] 5578] 66.9 13.6 | 10.62
10 | Trucking and courier services,
OXCEPL AIT. eeeeeeeeee 421 | 1,609.0 | 16734] 64.3 40 | 1278
11 | Child day care services .. a5 | 5168] 6779] 61.2 18 6.80
12 | New and used car dealers . 551 | 935.1 | 9962] 61.1 65 | 1253
13 | Automotive repair shops . 753) 9521] 6121] 60.0 10.9 | 10.60
14 | Masonry, stonework, and plastering 174 { 4173] 470.4] 53.1 12.7 | 14.99
15 | Services to buildings ............... 734} 841.0 | 8937] 527 63 7.45
16 | Offices and clinics of medical doctors . 801 | 1,529.0 | 1,581.5 | 562.5 34 | 12.20
17 _| Miscellaneous business services 738 | 1,354.5 | 14068 | 52.3 3.9 8.86
18 | Residential care . ce 36 | sa56! 637.7] 621 8.9 8.28
19 | Furniture and home furnishings stores . . s71| 4690] sies| 47.8 10.2 9.60
20 | Electrical work .... 173 | 5412] 5087] 47.5 as | 16.08

Data are annual averages and are preliminary.

2 The ces program collects earnings data only in the private sector. However, data compiled from administrative records.
by the €s-202 program show weekly earnings in local government, except education to be slightly above the average for all
Private sector industries, and those in local elementary and secondary schools to be slightly below average in 1993, the
Most recent year for which data were available.

9 = preliminary.

Nore: Quarterly data are computed by averaging the monthly estimates from the ces program. The earnings data are
1994 annual averages, and they represent production workers in goods-producing industries and nonsupervisory workers
in service-producing industries. The average for all private industries in 1994 was $11.12.

ers during the previous 3-year period. Employ-
ment among service and precision production work-
ers and among those in farming, forestry, and fish-
ing occupations was little changed in 1994.

Multiple jobholding

Among the changes introduced in the household
survey in January 1994 was the addition of
monthly questions to determine the extent to
which individual workers held more than one job
during a survey reference week.!! This made pos-
sible monthly estimates of multiple jobholding, or
moonlighting. Questions on moonlighting formerly
had been asked only four times since 1980, in spe-
cial supplements to the basic CPS questionnaire.
More than 7 million workers, on average, held
two or more jobs at the same time in 1994, and
they comprised about 6 percent of all workers.
(See table 7.) This level and proportion are con-

sistent with findings from the previous surveys.
Moonlighting patterns vary by worker group.
Young women (16 to 24 years old) were more
likely than their male counterparts to moon-
light—7.0 versus 5.6 percent. Among those 25
to 54 years old, however, the proportions of men
and women who moonlighted were about the
same, even though a great many employed
women in this age group also have child-care
responsibilities that limit their time available for
market work. For this reason, women who are
multiple jobholders are more likely to work at two
part-time jobs and to work fewer total hours than
their male counterparts. Whites were more likely
than either blacks or Hispanics to hold multiple jobs.

Labor force trends continue

The civilian labor force grew by 985,000 from
the first to the fourth quarter of 1994. This was

Monthly Labor Review February 1995 11



Lois M. Plunkert
and
Howard V. Hayghe

Lois M. Plunkert and
Howard V, Hayghe are
economists in the Office of
Employment and
Unemployment Statistics.

Strong employment gains

continue in 1994.

The labor market turned in a very strong performance,
as virtually all sectors and geographic regions
enjoyed substantial job gains; the largest

employment increase in 10 years was accompanied
by a steady decline in unemployment

strong employment growth and continued

declines in unemployment. Some 3.4 mil-
lion jobs were added to nonfarm payrolls and
the unemployment rate dropped to 5.6 percent
by yearend.

In the goods-producing sector, manufacturing,
which had lost jobs steadily from early 1989 to
mid-1993, rebounded in 1994, despite a drag on
employment growth caused by continued defense
cutbacks. In addition, manufacturing employers
pushed the average factory workweek to extraor-
dinarily high levels by expanding their use of over-
time. Construction firms also added large numbers
of workers, encouraged by low mortgage interest
rates that continued through the first half of the year.

Te 1994 job market was characterized by

The services industry itself accounted for
nearly half of the overall gains, but, within the
broad service-producing sector, substantial em-
ployment advances also occurred in retail trade
and in State and local governments.

Unemployment continued to trend downward;
by the fourth quarter, the jobless rate had fallen
to 5.6 percent from 6.6 percent in the first quar-
ter of the year. Well over a million fewer persons
were jobless at yearend than in the first quarter.

This article takes a detailed look at labor mar-
ket developments during 1994 based on data from
both the Current Employment Statistics (CES)
survey and the Current Population Survey (CPS).
Its emphasis is on the interrelationship of those
developments with trends in the economy. '

The economy’s impact on employment

The continued economic expansion fueled job
growth in 1994 at a pace not seen for 10 years.
At the same time, cutbacks in defense spending
led to a continuation of layoffs in several indus-
tries. This section explores the impact of these
and other economic factors on employment
growth in 1994. A discussion of the effect of
changing demographic and other factors on em-
ployment growth in these industries appears in a
subsequent section.

The expansion

The current economic expansion started its fourth
year in 1994 and, by yearend, had already lasted
longer than most post-World War II recoveries.

But, although the last recession had officially
ended in early 1991,” declines in nonfarm pay-
roll employment did not end until nearly a year
later. As economic activity accelerated in 1992
and gained further momentum in 1993 and 1994,
payroll employment growth moved more in tan-
dem with the resurgent economy. This can be
seen in chart 1, which plots changes in nonfarm.
employment with economic growth as repre-
sented by the gross domestic product (GDP), the
broadest measure of the economy.

The 1994 payroll employment increase of al-
most 3.4 million was the best annual performance
of the current economic expansion. To a large
extent, it is possible to trace the origins of job
growth in specific industries to changes in re-

Monthly Labor Review February 1995 3

1


Employment in 1994

Chart 2. Employment changes by major industry division, 1993 IV-1994 IV, seasonally adjusted

Mining

Construction

‘Transportation and
public utilities

Wholesale trade
Retail trade

Finance, insurance,

and real estate
Services
Goverment
1 1 \
500 ° 500 1000 45002000 2
Thousands

of the year. By the fourth quarter, the Midwest had
the lowest unemployment rate (4.7 percent), while
the West had the highest (6.6 percent).

Eight of the nine census divisions showed de-
clines in their unemployment rates between the
first and fourth quarters, the Mountain division
being the sole exception. Jobless rates in the
fourth quarter ranged from 4.2 percent in the
agrarian West North Central division to 7.2 per-
cent in the Pacific division.

14 Monthly Labor Review February 1995

Part time for economic reasons

The majority of persons who work part time (less
than 35 hours a week) do so by choice. How-
ever, some would prefer, and are available for,
full-time work but are working part time because
of what are termed economic reasons." Since the
first quarter of 1994, their number has declined
by half a million, to 4.4 million in the fourth
quarter, as shown in the following (in thousands):



Table 6. Employment by occupation, seasonally adjusted quarterly averages, 1994
{In thousands}
1994 ‘Change,
‘Occupation 1994
" m v 1994 1V
Managerial and professional specialty .... 33,199 | 33,798 | 34,037 | 34,411 1,272
Technical, sales, and administrative support 37,117 | 36,933 | 37,416 | 37,744 627
Service occupations ............ cee 16,982 16,961 | 16,846 | 16,806 -96
Precision production, craft, and repai 13,543 | 13,388 | 13,488 | 13,586 43
Operators, fabricators, and laborers - 17,624 17,870 | 17,946 | 18,069 445
Farming, forestry, and fishing 3,609 3,579 3,603 3,740 131

considerably less than the increase during the
same period in the prior year. The overall labor
force participation rate rose to almost 67 percent
by the end of 1994,

For adult women, the early 1990’s was a period
characterized by sluggish labor force growth; 1994
was no exception, as their labor force participa-
tion rate was unchanged over the year. For adult
men, the labor force participation rate also was
unchanged, interrupting (at least temporarily) this
measure’s slow, downward trend that extends all
the way back to the late 1940's.

Unemployment declines

The decline in unemployment that began in mid—
1992 continued during 1994, By the fourth quar-
ter, the number of unemployed persons stood at
7.3 million and the unemployment rate was 5.6
percent, down from 8.6 million and 6.6 percent,
respectively, in the first quarter. Unemployment
rate declines occurred not only among adult
workers, but among youth as well.

Similarly, unemployment declined for both
blacks and whites. The unemployment rate for
blacks fell from 12.7 percent in the first quarter
of 1994 to 10.4 percent in the fourth quarter. Over
the same period, that for whites declined 0.8 per-

centage point to 4.9 percent. The unemployment
rate for Hispanics, which had changed little for
most of the year, fell in the fourth quarter to 9.1
percent. It is noteworthy that, since 1990, the
jobless rate for Hispanics has been closer to the
tate for blacks than to the rate for whites. Dur-
ing the 1980's, the rate for Hispanics had held
roughly midway between those for whites and
blacks.

Reasons for unemployment. The number of
persons who were unemployed because they had
lost their jobs continued to trend downward in
1994. By the fourth quarter, job losers numbered
3.5 million, down from 4.2 million in the first
quarter, There were declines during the year in
each of the two major components of this group,
persons on temporary layoff who expected to be
called back to work, and persons not expecting re-
call (or “permanent” job losers).'? The latter group
accounted for about 35 percent of all unemployed
persons at the end of the year. (See table 8.)

Regional differences. The improvement in un-
employment in 1994 was spread rather evenly
across all census regions.'3 (See table 9.) In the
West, the last region to emerge from the recession,
the improvement was concentrated in the latter half

[Number in thousands]

Table 7. Multiple jobholders by sex, age, race, and Hispanic origin, 1994 annual averages

Both sexes Men Women
Characteristic Total | Multiple jobhoiders Total [Multiple jobhoiders | Total | Multiple jobholders.
employed | Number | Rate’ | employed | Number | Rate’ | ®TMployed | Number | Rate’
Total, 16 years and older 123,060 | 7,260 59 66,450 | 3,924 5.9 56610 | 3,336 59
16 to 24 years... 18,919 | 1,187 63 9,927 ‘857 5.6 8,992 830 7.0
25 to 54 years... 89,233 | 5,478 61 48,292 | 3,016 62 40,941 2,462 6.0
55 years and older 14,909 595 40 8,231 351 43 6.678 244 36
White 105,190 | 6,392 64 57,452 | 3,462 60 47,738 | 2,930 64
Black. 12,835 630 49 6,261 337 54 6,595 293 44
Hispanic... 2... ceeceeees 10,788 394 37 6,530 243 37 4,258 151 36

‘ Multiple jobholders as a percent of all employed persons in specified group.

Nore: Detail for the above race and Hispanic-origin groups will not sum to totals because data for the “other races” group are not presented and
Hispanics are included in both the white and black populations groups.

Monthly Labor Review February 1995 13



Employment in 1994

primarily in response to the increase in the num-
ber of small children and the elderly. Taken to-
gether, these two social service industries added
113,000 workers, and their average pay was sub-
stantially below the private sector average.

Health services. The small home health care
industry added more jobs than any other area of
health services—67,000. The continued expan-
sion of employment in this industry is the result
of the increased coverage of home care under
health insurance plans, efforts to minimize the

length of hospital stays, and improved technol-
ogy that enables patients to be treated at home.!°
Because of the large number of health aides they
employ, the average hourly earnings in home
health care are below the average for all private
industries. On the other hand, the other health
industry to make the top 20 list, offices and clin-
ics of medical doctors, pays above the average rate.
This industry, which added 53,000 workers, grew
partly because of the increased number of medical
procedures that are being performed outside of the
hospital setting in attempts to cut costs.

Who got the jobs?

The data that follow are from the household
survey. A major redesign of the survey was
implemented in January 1994, the same
month during which 1990 census-based
population controls, adjusted for the esti-
mated undercount, also were incorporated.
Because of these changes, 1994 data are not
directly comparable with data for 1993 and
earlier years. As a result, the following
analysis of 1994 labor force developments
is based on changes from the first through
the fourth quarters of 1994. This is a nec-
essary departure from the more traditional

approach to over-the-year analysis used
above in the section on nonfarm payroll
employment, which compares results from
the fourth quarter of 1993 to the averages
in each quarter of 1994,

Total employment grew by about 2.3 million
from the first quarter of 1994 through the fourth
quarter. The employment-population ratio—the
percent of the civilian noninstitutional popula-
tion aged 16 and older who are employed—in-
creased from 62.3 to 62.9 percent over the 3-quar-
ter period. Adult men accounted for a little over
half the increase in total employment, or about

/ 1.3 million. f employed adult
Table 3. Employment in industries related to the defense, women rose oe nom 000 te riod.
construction, automobile, and export markets, S ble 5 io * 1 al P .
seasonally adjusted fourth-quarter averages, (See table 5.) Teenage employment also grew
1993 and 1994 during 1994, with much of the improvement oc-
[Numbers in thousands} curring in the fourth quarter. |
Employment increased among whites through-
series 1993 1994 4900 ae ie out 1994, as their employment-population ratio
Vv ve rose by 0.7 percentage point to 64.0 percent. The
Number_| Percent number of employed blacks and Hispanics grew
Autos and related industries: 7 at an even faster pace, their employment-popu-
tor vehicles and equipment .. . 5 912 67 79 a A a
Auto-related, manufacturing... 277 292 15 $s lation ratios rising by 1.3 and 1.7 percentage
Auto-related, all industries .. . 1,319 1,406 87 66 points, respectively, to 56.8 percent for blacks
Construction and related and 60.7 percent for Hispanics.
industries:
Construction... 4724 5,021 297 63
Construction-related, ;
manufacturing. ..... 1,497 1,569 72 48 Oceupational employment
Construction-related, ii o in i
all industries ........ we 3,523 3,709 186 53 A Title nent than half of 1994’s gain ‘al total
Defense-dependent industries: emp ‘oyment occurred among managerial an
Defense-dependent, professional specialty workers, who, as a group,
manufacturing................ 1,003 ont -92 9.1 have relatively high earnings. The number of
Export sensitive industries: these workers rose by nearly 1.3 million between
export-sensitive, 5
manufacturing 6.604 6671 67 10 the first and fourth quarters of the year. (See table
Export-sensitive 6.) Also showing substantial growth in 1994 were
all industries 8,439 8,522 83 1.0 the technical, sales, and administrative support
p= preliminary. occupations, which gained about 627,000 work-
Nore: Industries related to autos, construction, and defense are those for which the ma- | 8 over the course of the year. The occupational
jority of employment is devoted to the production of goods and services for the designated | category of operators, fabricators, and laborers
industry. dusts sansive to exports are those in which at least 20 percent of employ- | aiso, grew, adding 445,000 workers. There had
been little change in the number of such work-

10 Monthly Labor Review February 1995

r a


Employment in 1994

for furnishings of all types helped propel sales
of furniture, appliances, autos, and other con-
sumer goods.

This economic strength led the Federal Re-
serve Board to raise the federal funds rate on
overnight borrowing between banks four times
during the first half of the year—from 3 to 4.25
percent—-and two more times in the second half,
to 5.5 percent. By the third quarter, the 30-year
conventional mortgage rate had risen to an aver-
age of 8.75 percent; mortgage refinancing all but
stopped, and the flood of new home buyers be-
gan to recede, The impact was felt in construc-
tion employment, where growth slowed in the
third quarter of 1994, Losses began even sooner

in mortgage banking and title insurance compa-
nies, which shed much of the extra help they had
hired over the prior year. Real estate continued
to add workers through the end of the year.

Construction showed renewed vigor in the
fourth quarter, partly due to unusually warm
weather but also reflecting the generally good
economy. As a result, construction added a sub-
stantial 297,000 jobs over the course of the year.
A variety of industries throughout the economy
are directly dependent on construction, such as
stone mining, sawmills, plumbing fixtures manu-
facturing, and building supply stores. The con-
struction-related industries added 186,000 jobs
in 1994, 72,000 of them in manufacturing.

Where the job growth is

Data from the CES (establishment survey) and
the CPs (household survey) provide different in-
sights into the types of jobs that were added to,
the economy in 1994. The discussion in this sec-
tion looks at specific industries that added the
largest number of workers (CES), and the next
section examines who got the jobs and what occu-
pations accounted for most of the growth (cps).4
Much of the job growth in 1994 was concen-
trated in a relatively small number of industries.
Three-fifths of the increase was in just 20 of the
288 industries for which the CES program makes
estimates at the three-digit level of disaggrega-
tion under the Standard Industrial Classification
(SIC) system.° In fact, two industries—person-
nel supply services and eating and drinking
places—accounted for 1 in 5 of the payroll jobs
added. While the 20 industries were about evenly

split between above- and below-average wage
industries, those with lower earnings added far
more jobs. The “big 20” are ranked in table 4
and discussed in the subsections that follow.

Economically-driven industries

Business services. The number one growth in-
dustry was personnel supply services, a group
of business services that includes temporary help,
employee leasing, and employment agencies.
This industry alone added 424,000 workers in
1994, The expanded use of temporary help con-
tinued a trend started during the expansion of
the 1980’s. Employers are increasingly relying
on agencies that can provide workers in a vari-
ety of occupations, to whom the employer need
make no permanent commitment. This enables

Table 1. Percent change from the previous quarter, selected economic indicators, seasonally adjusted
annual rates, 1992~94
1992 1993 1994
ci
ategory 1 " m v t u n ' t i v
Real a0! oe ceeee 34 24] 35 | 57 | 121 24 | a7 | 63 | 33a | 44 40 | 45
Disposable personal income
(1987 dotiars) 59 | 21 | 17 | 108 | -74] 47 8 | 43] 34] 35 | 31] 74
Personal consumption expenditures’ 58 | 17 / 39 | 56) 16] 26 | 39 | 40 | 47 | 13 | 31] 46
Exports of goods and services! . 61 15 | 53 | 72] -1.0| 77 | -32 | 217 | -35 | 166 | 148 | 142
State and local revenue 58 | a2] 31] 100] -2] 92 | 54 | 106 A] 74] 64] —
Productivity:
Nonfarm business sector 42 19 | 28 | 38] -20 4 |) 40 | 49} 29} 21} 29} —
Manufacturing. ..... 6] 13] 26 |] 38] 37] 24 | 30 | eo | 64] se | 36) —
Unfilled orders for nondetense
capital goods, except aircraft ......) -1.3 | -46 | -a1 | 45] 19] 27 | 31 | 149 | 194 | 235 | 206 | 202
Industrial production for defense and
space equipment 2... evee -35 | -5.7 | 68 | -79 | -11.4 |-107 | -94 | -a1 {-102 | -79 | -161 | -18

* Quantity indexes, fixed 1987 weights.
Note: Data for the fourth quarter of 1994 are preliminary. Dash indicates data not available.
Sources: U.S. Department of Commerce, Bureau of Economic Analysis; Federal Reserve Board; and Bureau of Labor Statistics.

6 Monthly Labor Review February 1995



5 This list of 288 industries includes any two-digit level
industries that are not further subdivided in the sic system.

6 High- and low-wage industries in the private sector are
defined here as having hourly earnings that are above or
below the average for all industries in 1994, as measured by
the ces survey. In the public sector, average weekly earn-
ings for 1993, compiled from administrative records by the
Bureau’s es—202 program, are used.

7 Average hourly earnings are for production workers in
the goods-producing sector and for nonsupervisory work-
ers in the service-producing sector; data are for workers on
private payrolls. Estimates of hourly earnings are average
levels for all of these workers, not just for the newly hired
employees. The household survey data show that employ-
ment growth is disproportionately among the higher paying
occupations in these industries. See discussion in this ar-
ticle on employment growth by occupation.

® Eating and drinking places is defined at the two-digit
sic level, and subcategories are not available in the ces pro-
gram. Therefore, it appears in the ranking of three-digit sic
industries in order to account for all employment.

°For a discussion of historical trends, see Teresa L. Morisi,
“Employment in public schools and the student-to-emptoyee
ratio,” Monthly Labor Review, July 1994, pp. 40-44.

10 A forthcoming Monthly Labor Review article by Laura
Freeman will discuss employment trends in home health care.

1! Multiple jobholders are defined as persons who, dur-
ing the reference weck, had two or more jobs as wage and
salary workers, were self-employed and also held a wage
and salary job, or worked as an unpaid family worker and
also held a wage and salary job. Excluded are private house-

hold workers, self-employed persons with multiple busi-
nesses, and persons with multiple jobs as unpaid family
workers.

12 Beginning in January 1994, the category reflects all
persons not on temporary layoff, including “permanent” job
losers as well as persons who became unemployed when
their temporary job ended, Seasonally adjusted data are avail-
able for the overall group but are not yet available for the
two component groups separately.

"3 The four census regions of the United States are, North-
east, South, Southwest, and West. Within the Northeast, the
New England division includes Connecticut, Maine, Mas-
sachusetts, New Hampshire, Rhode Island, and Vermont; and
the Middle Atlantic division includes New Jersey, New York,
and Pennsylvania. Within the South, the South Atlantic di-
vision includes Delaware, District of Columbia, Florida,
Georgia, Maryland, North Carolina, South Carolina, Vir-
ginia, and West Virginia; the East South Central division
includes Alabama, Kentucky, Mississippi, and Tennessee;
and the West South Central division includes Arkansas,
Louisiana, Oklahoma, and Texas. Within the Midwest, the
East North Central division includes Illinois, Indiana, Michi-
gan, Ohio, and Wisconsin; and the West North Central divi-
sion includes Iowa, Kansas, Minnesota, Missouri, Nebraska,
North Dakota, and South Dakota. Within the West, the Moun-
tain division includes Arizona, Colorado, Idaho, Montana,
Nevada, New Mexico, Utah, and Wyoming; and the Pacific

sion includes Alaska, California, Hawaii, Oregon, and
Washington.

‘4 Economic reasons include slack work or unfavorable
business conditions, inability to find a full-time job, or a
seasonal decline in demand.

Monthly Labor Review February 1995 17



Some restraints

Defense cutbacks. Defense cutbacks continued
in 1994. Employment in industries that relied on
defense to support at least half of their jobs in
1987 (the last year before major defense spend-
ing cuts) has fallen dramatically over the past 3
years. In 1994, these defense-dependent manu-
facturing industries, such as aircraft, missiles and
space vehicles, and search and navigation equip-
ment, lost 92,000 jobs. The declining trend
slowed, however, in the second half of the year.

Interest rates. Interest rates played an impor-
tant role in the 1994 economy, first as a stimu-
lant and then as a restraint. Very low interest rates,
by recent standards, buoyed consumer spending
in 1993 and early 1994. The rate on 30-year

mortgages fell to an average of 7.0 percent in
the fourth quarter of 1993 and remained very low
during the first quarter of 1994. Construction was
clearly a beneficiary of low mortgage rates, as
brisk sales of new homes led to strong spring
hiring in 1994. By the end of the second quarter,
189,000 jobs had been added in construction,
primarily among special trade contractors such
as masonry, carpentry, and electrical work.
Finance and real estate also had strong job
growth in 1993 that continued into 1994, due
primarily to business generated by the low mort-
gage rates. Mortgage bankers were swamped
with requests for financing new homes and refi-
nancing existing home loans. The combination
of extra cash in the hands of homeowners who
had refinanced and the needs of new homeowners

Quarterly and annual average data from the
Current Population Survey in this article are
shown for 1994 only. They are not directly
comparable with data for 1993 and earlier
years because of two changes to the survey
that became effective in January 1994. The
first was the introduction of new population
estimates based on the 1990 census, adjusted
for the estimated population undercount. This
adjustment had the effect of raising popula-
tion estimates, as well as the related labor
force estimates, The second was a major re-
design of the survey that was undertaken to
obtain more accurate and comprehensive in-
formation on the labor force. This included
both completely new, as well as revised, ques-
tions for the classification of individuals as
employed or unemployed, the collection of
new data (such as a monthly measure of mul-
tiple jobholders), and the incorporation of a
major definitional change (discouraged work-
ers), as well as several relatively minor
changes in definitions, including one relating
to the definition of unemployment. In addi-
tion, a fully computerized data collection sys-
tem was implemented.

The definition of discouraged workers was
altered to include the requirement that a per-
son had searched for work in the prior 12
months and was currently available to take a
job. Under the revised definition, the number
of discouraged workers is about half what it
was under the former definition. In addition,
a measurement change was introduced with
Tespect to the classification of persons work-
ing part time for economic reasons. Two cri-
teria that formerly were inferred were made
explicit in the new questionnaire: individuals

Revisions to the Current Population Survey

who usually work part time are now asked if
they want to work 35 hours or more and, if
so, whether they are available to take a full-
time job. Under the new criteria, the number
of persons working part time for economic
Teasons is about 20 percent lower than levels
obtained using the old measure.

The 1994 data also may be affected by the
transition to the redesigned survey. For ex-
ample, seasonal adjustment factors, of neces-
sity, have been calculated based on data col-
lected using the previous questionnaire. These
factors may not fully capture the pattern of sea-
sonality in the current data. Hence, the quarter-
to-quarter comparisons of labor force data in this
article, and similar comparisons presented else-
where, should be interpreted with caution.

For a comprehensive examination of the ex-
pected effects of the redesign on the house-
hold survey data, see “Revisions in the Cur-
rent Population Survey Effective January
1994,” in the February 1994 issue of the BLS
publication Employment and Earnings. At the
time that this article was written, it was esti-
mated that the combined effect of the intro-
duction of the 1990 census population esti-
mates (as adjusted) and the redesigned sur-
vey was to add 0.6 percentage point to the
national unemployment rate. However, sub-
sequent research conducted by BLS staff sug-
gests that the probable effect on the jobless
rate was much smaller, possibly as little as
0.2 percentage point. For more information
on this issue, see. “The cps After the Rede-
sign: Refocusing the Economic Lens,” a pa-
per presented on December 15, 1994 at the
National Bureau of Economic Research Con-
ference on Research in Income and Wealth.

Monthly Labor Review February 1995 5



Employment in 1994

lated macroeconomic factors (such as personal con-
sumption, investment, exports, and government
spending), some of which are themselves influ-
enced by trends in total employment. (See table 1.)

More income leads to more consumption (and
Jobs in retail trade)...

Personal income continued the strong growth
of late 1993 into the first half of 1994, slowing
somewhat in the third quarter and then rebound-
ing at year’s end. Much of the gain in personal
income was due to growth in the number of work-
ers and in their average weekly earnings, as mea-
sured by the CES survey of nonfarm payrolls. The
slowing of personal income gains in the third
quarter reflects a declining rate of job growth,

As workers feel more confident about job se-
curity and the unemployed find jobs, they spend
money more freely. The momentum from strong
personal consumption during the second half of
1993 and first quarter of 1994 led retailers to
accelerate hiring. As a result, large employment
gains occurred in most types of retail stores,
which added 750,000 jobs in 1994, the largest
increase since 1984. (Specific industries within
the major divisions are discussed in the next sec-
tion, “Where the job growth is.”) Although
wholesale trade is closely related to retail, its
growth rate was slower than the average for all
industries, partly because of restructuring and
competition from retailers who increasingly deal
directly with manufacturers. Nevertheless, 1994
was the best year for jobs in wholesale trade since
1988. (See table 2 and chart 2.)

... which requires more goods and services
{and jobs in manufacturing and services)...

As sales of goods and services grew, so did
the need to replace depleted inventories and pro-
vide more services to consumers. As a result, GDP
surged in the fourth quarter of 1993, and then
continued at a strong pace throughout 1994.
Manufacturers responded to growing product
demand by continuing to increase the use of over-
time hours at their factories, which reached the
highest level in the 38-year history of the series.
While the addition of overtime is normal in the
first years of an expansion, factories typically add
workers within a few months of the increase in
hours, restoring employment lost during the re-
cession. In the current expansion, however, sus-
tained gains in factory employment were not seen
until 1994, when the expansion was 3 years old.
Virtually all of the net job gains were in durable
goods manufacturing, which is more cyclically
sensitive than nondurable goods.

The primary manufacturing industries to profit
from the strong consumer spending were motor
vehicle makers and their suppliers, such as pro-
ducers of automotive stampings and flat glass.
Pent-up demand to replace old vehicles and low

4 Monthly Labor Review February 1995

interest rates on auto loans early in the year
helped add a total of 82,000 jobs in motor ve-
hicles and related manufacturing industries in
1994; the number grows to 154,000 when auto
dealers and motor vehicle wholesale distributors
are added. (See table 3.)

The pick-up in consumer spending extended
not only to durable goods like cars, appliances,
and furniture, but also to services. Some of the
gains were in directly provided services, such as
auto repair, and others were in services to busi-
nesses that were straining to meet increased de-
mand for their products.

. . + Which leads to more capital investment
{and more manufacturing jobs). . .

The strong demand for more goods and ser-
vices provided motivation for businesses to in-
vest in themselves to improve productivity, ex-
pand capacity, and replace worn-out equipment.
This is shown by the surge in orders for nonde-
fense capital goods (excluding aircraft) during
1994. The manufacturing industries that produce
this capital equipment were not able to fill the
orders with the existing work force, and unfilled
orders piled up. (See table 1.) This growing back-
log of orders for capital equipment was partly
responsible for employment gains in the fabri-
cated metals, industrial machinery, and electron-
ics equipment industries, which added about
50,000 workers each.

... and generates more tax revenue (and gov-
ernment jobs).

Revenues from sales taxes and income taxes
in 1993 allowed State and local governments to
budget for more workers in 1994, when they
added more than 300,000 jobs. At the Federal
level, however, employment declined as part of
an effort to reduce the Federal deficit. The number
of Federal employees fell by 46,000, despite the
addition of 30,000 U.S. Postal Service workers.

Exports

Improving economic conditions in many of the
countries that are important purchasers of U.S.
products helped boost exports during the last
quarter of 1993 and most of 1994. This is re-
flected in developments among a group of in-
dustries that are sensitive to exports (those with
at least 20 percent of their employment tied to
exports in 1990); the majority of these are du-
rable goods manufacturing industries, such as
computer equipment and oil field machinery. The
number of jobs in this large group of export-sen-
sitive industries grew by 83,000 in 1994, with
67,000 of them in manufacturing. Of course, ex-
ports were just one force behind the employment
gains in these industries; improved domestic de-
mand also played a major role.



Quarter Change,
—————__ 1994 I-
I i Wt IW 19941V
Persons who
worked part time
for economic
reasons
in 1994..... 4,914 4,779 4,383 4,415  -499

(Because of changes to the survey introduced in
January 1994, estimates of the number of per-
sons classified as working part time for economic
reasons are not comparable with estimates de-
rived from data collected by the questionnaire
that was in use up through December 1993. See

explanation in box.)

Not in the labor force

In an average month during 1994, nearly 66 mil-
lion persons aged 16 and older were classified as
not in the labor force, that is, they were neither

working nor looking for work. The vast majority
of these persons were retired, disabled, taking care
of home or family, or attending school, and had no
desire to be in the labor market. There were, how-
ever, 1.8 million persons who wanted and were
available for work but were no longer actively look-
ing after having searched for a job during the prior
12 months. Half a million of these persons were
classified as discouraged workers. (See table 10. and
explanation in box.) Discouraged workers are per-
sons who gave essentially labor market reasons for
not looking for work during the survey reference
week. Specifically, they believed no work was avail-
able in their line of work or area; they had been
unable to find work; they felt that they lacked the
necessary training, schooling, skills, or experience
for the jobs that were available; they believed that
employers thought they were too young or old for
the job; or they thought they had been subjected to
some other type of discrimination. Compared with
the labor force as a whole, discouraged workers
are disproportionately young (29 percent are un-

[Numbers in thousands}

Table 8. Reason for unemployment, seasonally adjusted quarterly averages, 1994

1994 Change,
Reason for unemployment 1994 -
' " a v 1994 1V
Job losers and persons who completed
temporary jobs : 4,209 3,751 3,714 3,483 -726
On temporary layott.. 1,084 907 956 886 198
Not on temporary layoff 3,125 2,844 2,759 2,597 528
Job leavers 831 798 810 723 108
Reentrants. . 2,916 2,937 2,715 2,575 341
New entrants 637 596 605 582 55
Table 9. Unemployment rates by census region and division, seasonally adjusted
quarterly averages, 1994
1994 Change,
Region and division 1994
' m v 19941V
United States 0.0.0.0... cece ee renee eee 66 62 6.0 5.6
Northeast... 68 66 64 6.0
New England . 62 5.8 5.9 56
Middle Atlantic 7A 69 66 6.1
South cece 63 6.0 58 5.5
South Atlantic . : 61 5.8 55 5.3
East South Central . 60 54 55 52
West South Central . 68 6.6 65 6.0
Midwest ...-.. 02... 0.08 57 48 5.1 47
East North Central... 62 5.3 5.6 49
West North Central . 48 38 44 42
West ...... 7.6 75 73 66
Mountain 54 5.3 5.6 $1
Pacific. .. as 83 80 72

definitions of the census regions and divisions.

Nore: Estimates of seasonally adjusted unemployment rates for 1994 by census region and division shown in this table
may not agree with those published elsewhere because updated seasonal factors that reflect the experience through the
fourth quarter of 1994 were not available when this table was being prepared for publication, See text footnote 13 for the

Monthly Labor Review February 1995

15