Monthly Labor Review February 2003 3

U.S. Labor Market, 2002

U.S. labor market in 2002:

continued weakness

The unemployment rate edged up in 2002;

without a clear sign that the economy

had returned to sustainable growth,

most employers remained reluctant to hire

Terence M.

McMenamin,

Rachel Krantz,

and

Thomas J. Krolik

Terence M.

McMenamin is an

economist in the

Division of Labor Force

Statistics; Rachel

Krantz is an economist

in the Division of

Current Employment

Statistics; and Thomas

J. Krolik is an

economist in the

Division of Local Area

Unemployment

Statistics, all in the

Office of Employment

and Unemployment

Statistics, Bureau of

Labor Statistics.

Email:

McMenamin_T@bls.gov

Krantz_R@bls.gov

Krolik_T@bls.gov

T

he 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 midyear, 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.

Workers benefited from wage growth and low

inflation, as their real average weekly earnings

grew by 1.1 percent over the year. The length of

the average workweek for private industry also

increased in 2002, although only by 0.1 hour. This

was the first time the average work week had expanded since reaching a high in 1997.

Both the number of unemployed persons and

the jobless rate edged up in 2002. The unemployment rate was 5.9 percent in the fourth quarter of 2002, up 0.3 percentage point from the rate

a year earlier, and the number of unemployed

persons rose by nearly 500,000 to 8.4 million.

These increases were much smaller than in 2001.

With little growth in employment, however, those

unemployed tended to stay without a job longer.

The average (mean) duration of unemployment

rose by 3.9 weeks to 17.9 weeks in the fourth

quarter of 2002, while the number of persons un-
4 Monthly Labor Review February 2003

U.S. Labor Market, 2002

The Bureau of Labor Statistics produces two

monthly employment series that are independently obtained: the estimate of total nonfarm

jobs, derived from the Current Employment Statistics (CES or establishment) survey, and the estimate of total civilian employment, derived from

the Current Population Survey (CPS or household survey).

The CES survey is an employer-based survey

that provides data on the number of payroll jobs

in nonfarm industries. The CPS is a survey of

households that provides data on the labor force

status (employed, unemployed, and not in the

labor force) of individuals, and includes information on their demographic characteristics. The

surveys are largely complementary.

Employment estimates from the CPS include

both agricultural and nonagricultural sectors

and count persons in any type of work arrangement: wage and salary workers, self-employed

persons, private household workers, and unpaid workers who worked 15 hours or more in

an enterprise operated by a family member. Estimates from the CES survey refer only to persons on wage-and-salary payrolls and exclude

private household workers. As a result, the

count of employment from the CPS is larger

than that of the CES survey.

Partially offsetting the higher estimates from

the CPS is the fact that the CPS is a count of persons, and individuals are counted only once, regardless of the number of jobs they hold. In contrast, the CES survey is a count of jobs and includes each job for persons who work in more

than one establishment.

There are other differences in the surveys’

methodology and coverage. For example, the reference period for the CPS is the week that includes the 12th day of the month, while, for the

CES survey, it is the pay period that includes the

12th of the month. Pay periods vary in length

and can be longer than 1 week. It is therefore

possible for the CES survey estimate of employment to reflect a longer reference period than that

used for the CPS.

The “universe” for the CPS is the civilian

noninstitutional population. This includes persons 16 years of age and older residing in the

United States who are not confined to institutions (for example, correctional, psychiatric,

and long-term care facilities), and who are not

on active duty in the Armed Forces. In this

regard, the coverage of the CES survey is

broader: there is no age restriction in the CES,

and wage and salary civilian jobs held by uniformed military personnel are counted, and

persons who commute into the United States

from Mexico or Canada to work are counted as

employed.

Effective with the release of data for January

2003, a number of changes affect estimates from

the CPS. These changes were undertaken to

benchmark the survey data to more current estimates of the U.S. population; to adopt new standards for data on race, ethnicity, industry, and

occupation; and to improve seasonal adjustment

procedures. The data included in this article do

not reflect these changes, as they are based on

the procedures and estimates that were in place

at the end of 2002.

Conceptual differences between employment estimates

from establishment and household surveys
Monthly Labor Review February 2003 5

employed for 27 weeks or more increased by 705,000. Total

civilian employment was up slightly over the year, entirely

due to increases among adult women. The employment increase in service occupations was largely offset by widespread job losses, particularly in precision production, craft,

and repair occupations, as well as in operator, fabricator, and

laborer fields.

This article examines developments affecting U.S. labor

markets in 2002. The data are primarily from the Current Employment Statistics (CES) survey, the Current Population Survey (CPS), and the Local Area Unemployment Statistics (LAUS)

program. All three programs report data monthly, although

quarterly averages are used in this analysis unless otherwise

noted. Over-the-year comparisons measure changes from

fourth quarter 2001 to fourth quarter 2002 unless otherwise

noted. (See page 4 for an explanation of differences between

the CES and CPS surveys.)

Many businesses were reluctant to add new employees in

2002, as they worked through problems of debt and excess capacity and remained conservative spenders.2

 The

employment trend in the help supply services industry,

which supplies personnel on a contract basis, illustrates

this reluctance well. Businesses sometimes contract for

temporary employees if demand for the company’s products or services is uncertain.3

 The help supply services

industry added 111,000 jobs in the second quarter of 2002,

as economic conditions appeared to improve. This followed a loss of 745,000 jobs over the prior 6 quarters. As

the year progressed, however, and the business environment remained uncertain, job growth in the help supply

services industry stalled. (See chart 1.)

Besides their reluctance to hire new employees, businesses were also conservative spenders overall. Nonresidential private fixed investment shrank 1.9 percent in 2002.

Most of this contraction occurred in the first quarter. From

the second to fourth quarters, increased spending on

equipment and software countered reduced spending on

structures. Over the year, equipment and software expenditures rose 3.0 percent. This compares to average annual

growth of 6.9 percent during the 1990s.4 Industrial production of business equipment, a measure of business

spending on manufactured goods, declined 2.8 percent

over the year. 5 Despite improvement compared to 2001,

these indicators nonetheless showed weak business

spending in 2002.

-300

-200

-100

0

100

200

-300

-200

-100

0

100

200

SOURCE: Bureau of Labor Statistics, Current Employment Statistics Survey.

Chart 1. Quarterly employment changes in help supply services, 2001–02

Thousands

NOTE: Data are seasonally adjusted.

Thousands

 I

2001

 II

2001

 III

2001

 IV

2001

 I

2002

 II

2002

 III

 2002

 IV

2002
6 Monthly Labor Review February 2003

U.S. Labor Market, 2002

The mild improvement in business spending on equipment and software aided the employment situation of several

manufacturing industries, although this improvement often

translated into a slowing of job losses rather than job gains.

Over the year, manufacturing lost 642,000 jobs, as companies

chose to draw down existing inventories even as new orders

began to grow. 6 (See table 1.) However, relative to 2001, the

rate of factory job losses slowed by about half. Job losses in

electronic and other electrical equipment as well as in industrial machinery and equipment slowed considerably in

2002 relative to the prior year. Still, in 2002, these two industries lost a total of 269,000 jobs, accounting for 42 percent of

total job losses in manufacturing. Reduced foreign demand

for electrical equipment and industrial machinery was one

reason for the continued job losses, as exports of computer

and electronic products fell 13.6 percent and exports of machinery fell 8.3 percent.7

 One factor that influenced manufacturers’ competitiveness abroad was the strong U.S. dollar,

which made U.S.-produced goods relatively expensive. In

2002, the average monthly value of the dollar relative to the

currencies of major U.S. trading partners reached its highest

level since 1985.8

In recent years, primary metal industries have had difficulties competing with low-priced imports. Primary metals

lost 44,000 jobs in 2002, although its employment decline

slowed during the year as the enactment of temporary steel

tariffs in March raised the relative price of steel imports and

boosted demand for domestic steel. Although several steel

firms filed for bankruptcy protection over the year,9the

industry’s situation improved as the rate of job loss slowed

and output grew 13.3 percent after having declined in each of

the 2 prior years.10

In contrast, business spending on structures—which accounted for about 20 percent of all business investment in

2002—did not show relative improvement over the year, but

continued its 2-year descent as businesses consolidated

space and closed factories in order to eliminate excess capacity.11

 Thus, despite demand derived from a strong housing market, the construction industry lost 93,000 jobs. The

job losses were predominately in special trade contractors (–75,000), especially in electrical work, and heavy construction (–39,000). Employment in engineering and architectural services, which sells its services primarily to the construction industry,12 fell by 24,000 in 2002. This was the first

year employment in this industry had contracted since 1991.

Construction-related manufacturing industries 13 such as lumber and wood products; stone, clay, and glass products; and

fabricated structural metal products also weakened in 2002,

and together they lost 31,000 jobs over the year.

Wholesale trade and trucking and warehousing, two industries that are closely tied to domestic manufacturing activity, also experienced relative improvement in their employment situation. The pace of job losses in wholesale trade

slowed from 2.9 percent in 2001 to 0.9 percent in 2002. Paralleling the manufacturing industry, the job losses in wholesale

trade were concentrated in professional and commercial

equipment, electrical goods, and machinery, equipment, and

supplies, which collectively lost 87,000 jobs in 2002. Employment in trucking and warehousing was essentially unchanged

in 2002, after declining by 25,000 in the prior year; this reflected an increase of 8 percent in truck tonnage in the first 3

quarters, a sign of improved demand for trucking services.14

One area that experienced no relief from prior spending

excesses was the communications industry, where the rate of

job loss accelerated in 2002. Driven by high expectations of

future demand, the communications industry had over-invested in fiber-optic networks and equipment in the 1990s.

These expectations had not yet been realized by 2002 and

infrastructural capacity continued to exceed demand, resulting in intense price competition and industry consolidation.15

Over the year, employment contracted by 6.3 percent as

106,000 jobs were lost; this compares with average annual job

growth of 3.8 percent from 1992 through 2000. Manufacturers

of communications equipment reduced their payrolls by

38,000 in 2002, and about matched the prior year’s rate of

decline.

Business investment in transportation equipment declined

in 2002,16 mainly reflecting weak demand for civil aircraft in

light of poor demand for air travel. Additionally, aircraft sales

were increasingly split between U.S. and foreign manufacturers.17 Due to stiff competition and declining demand, domestic aircraft and parts manufacturing suffered from excess

production capacity and weakening profits; over the year, the

industry cut 62,000 jobs, amounting to 13.7 percent of its

workforce. Aircraft and parts manufacturing was but one of

several industries affected by reduced travel levels.

Travel-related industries faced challenging markets in

2002, as business travel remained depressed and the effects

of the September 11, 2001, terrorist attacks continued to

adversely affect business conditions.18 The effects were

most visible in transportation, and especially in transportation by air. Transportation lost 84,000 jobs in 2002 after losing more than twice as many jobs the prior year. About half of

these job losses occurred from the fourth quarter of 2001 to

the first quarter of 2002, during the immediate aftermath of the

September 11th tragedy. During the past 2 years, transportation by air accounted for the majority of the job losses in

transportation.

Employment in air transportation began to fall early in 2001,

as the industry experienced the effects of reduced levels of

business travel. At that time, businesses were scrutinizing

their financial statements and eliminating unnecessary expenses as the economy fell into recession. This frequently
Monthly Labor Review February 2003 7

Employees on nonfarm payrolls by industry, seasonally adjusted quarterly averages,1996–2002

[Numbers in thousands]

IV IV IV Thousands Percent Thousands Percent Thousands Percent

Total nonfarm ........................................................ 120,689 131,130 130,806 2,088 1.7 –1,055 –.8 –324 –.2

Total private ........................................................ 101,255 110,035 109,441 1,756 1.7 –1,516 –1.4 –594 –.5

Goods-producing .............................................. 24,660 24,375 23,626 –57 –.2 –1,251 –4.9 –749 –3.1

Mining ............................................................ 583 566 552 –3 –.6 15 2.7 –14 –2.5

Metal mining ................................................ 54 34 32 –4 –8.8 –6 –15.0 –2 –5.9

Oil and gas extraction .................................. 325 340 332 3 .9 18 5.6 –8 –2.4

Nonmetallic minerals, except fuels ................. 107 110 109 1 .6 –3 –2.7 –1 –.9

Construction ................................................... 5,548 6,635 6,542 217 3.6 –40 –.6 –93 –1.4

General building contractors ......................... 1,282 1,456 1,477 35 2.6 –36 –2.4 21 1.4

Heavy construction, except building ............... 792 924 885 26 3.1 23 2.6 –39 –4.2

Special trade contractors .............................. 3,474 4,255 4,180 156 4.1 –27 –.6 –75 –1.8

Manufacturing ................................................. 18,529 17,174 16,532 –271 –1.5 –1,226 –6.7 –642 –3.7

Durable goods ............................................. 10,845 10,249 9,755 –119 –1.1 –882 –7.9 –494 –4.8

Lumber and wood products ........................ 784 773 761 –2 –.3 –41 –5.0 –12 –1.6

Furniture and fixtures ................................ 506 496 485 –2 –.4 –60 –10.8 –11 –2.2

Stone, clay, and glass products ................. 550 561 555 2 .4 –17 –2.9 –6 –1.1

Primary metal industries ............................ 707 626 582 –16 –2.4 –69 –9.9 –44 –7.0

Fabricated metal products ......................... 1,460 1,443 1,401 –3 –.2 –98 –6.4 –42 –2.9

Industrial machinery and equipment ............ 2,122 1,910 1,790 –42 –2.1 –214 –10.1 –120 –6.3

Computer and office equipment ............... 363 325 294 –8 –2.2 –34 –9.5 –31 –9.5

Electronic and other electrical

equipment ......................................... 1,669 1,520 1,371 –30 –1.9 –236 –13.4 –149 –9.8

Electronic components and

accessories ...................................... 623 605 537 –4 –.6 –114 –15.9 –68 –11.2

Transportation equipment ........................... 1,799 1,719 1,647 –16 –.9 –106 –5.8 –72 –4.2

Motor vehicles and equipment ................. 969 921 907 –10 –1.0 –80 –8.0 –14 –1.5

Aircraft and parts .................................. 471 453 391 –4 –.8 –7 –1.5 –62 –13.7

Instruments and related products ............... 860 825 792 –7 –.8 –24 –2.8 –33 –4.0

Miscellaneous manufacturing industries ...... 388 373 372 –3 –.8 –18 –4.6 –1 –.3

Nondurable goods ........................................ 7,685 6,925 6,777 –152 –2.1 –344 –4.7 –148 –2.1

Food and kindred products ......................... 1,687 1,688 1,687 0 .0 2 .1 –1 –.1

Tobacco products ..................................... 42 34 36 –2 –4.1 1 3.0 2 5.9

Textile mill products .................................. 621 453 425 –34 –6.1 –67 –12.9 –28 –6.2

Apparel and other textile products .............. 851 540 509 –62 –8.7 –73 –11.9 –31 –5.7

Paper and allied products .......................... 685 626 611 –12 –1.8 –26 –4.0 –15 –2.4

Printing and publishing .............................. 1,542 1,453 1,399 –18 –1.2 –89 –5.8 –54 –3.7

Chemicals and allied products .................... 1,032 1,015 1,007 –3 –.3 –15 –1.5 –8 –.8

Petroleum and coal products ...................... 142 127 125 –3 –2.2 1 .8 –2 –1.6

Rubber and miscellaneous plastics

products ............................................. 990 934 923 –11 –1.2 –66 –6.6 –11 –1.2

Leather and leather products ...................... 93 56 55 –7 –9.6 –11 –16.4 –1 –1.8

Service-producing .............................................. 96,029 106,755 107,179 2,145 2.1 196 .2 424 .4

Transportation and public utilities ...................... 6,292 6,912 6,712 124 1.9 –202 –2.8 –200 –2.9

Transportation ............................................... 4,042 4,375 4,291 67 1.6 –175 –3.8 –84 –1.9

Railroad transportation ................................. 229 232 224 1 .3 –6 –2.5 –8 –3.4

Local and interurban passenger

transit .................................................... 444 480 467 7 1.6 5 1.1 –13 –2.7

Truc king and warehousing ............................. 1,644 1,830 1,827 37 2.2 –25 –1.3 –3 –.2

 Water transportation .................................... 175 190 191 3 1.7 –4 –2.1 1 .5

Transportation by air ..................................... 1,110 1,194 1,147 17 1.5 –104 –8.0 –47 –3.9

Pipelines, except natural gas ........................ 14 15 15 0 1.4 0 .0 0 .0

Transportation services ................................ 426 435 421 2 .4 –41 –8.6 –14 –3.2

Communications and public utilities .................. 2,250 2,537 2,421 57 2.4 –27 –1.1 –116 –4.6

Communications ........................................... 1,375 1,688 1,582 63 4.2 –23 –1.3 –106 –6.3

Electric, gas, and sanitary services ............... 875 849 839 –5 –.6 –4 –.5 –10 –1.2

Wholesale trade ................................................. 6,549 6,708 6,646 32 .5 –197 –2.9 –62 –.9

Durable goods ................................................ 3,849 3,963 3,886 23 .6 –155 –3.8 –77 –1.9

Nondurable goods ........................................... 2,700 2,745 2,759 9 .3 –42 –1.5 14 .5

 Retail trade ....................................................... 21,815 23,412 23,228 319 1.4 –31 –.1 –184 –.8

Building materials and garden supplies ............... 917 1,050 1077 27 2.7 24 2.3 27 2.6

General merchandise stores .............................. 2,714 2,873 2834 32 1.1 –21 –.7 -–39 –1.4

Department stores ....................................... 2,377 2,537 2,495 32 1.3 –14 –.5 –42 –1.7

Food stores .................................................... 3,466 3,440 3,377 –5 –.2 –34 –1.0 –63 –1.8

Change, fourth quarter to fourth quarter

1996 2001 2002 Average change

 1996–2001 Industry 2000–2001 2001–2002

Table 1.
8 Monthly Labor Review February 2003

U.S. Labor Market, 2002

Continued—Employees on nonfarm payrolls by industry, seasonally adjusted quarterly averages,1996–2002

[Numbers in thousands]

IV IV IV Thousands Percent Thousands Percent Thousands Percent

Change, fourth quarter to fourth quarter

1996 2001 2002 Average

1996–2001 Industry 2000–2001 2001–2002

Table 1.

Automotive dealers and service

stations ................................................... 2,293 2,433 2,428 28 1.2 14 .6 –5 –.2

New and used car dealers ............................. 1,042 1,127 1,127 17 1.6 11 1.0 0 .0

Apparel and accessory stores ......................... 1,100 1,171 1,174 14 1.3 –19 –1.6 3 .3

Furniture and home furnishings stores .............. 990 1,149 1,167 32 3.0 8 .7 18 1.6

Eating and drinking places .............................. 7,589 8,218 8,112 126 1.6 24 .3 –106 –1.3

Miscellaneous retail establishments ................. 2,746 3,079 3,060 67 2.3 –26 –.8 –19 –.6

Finance, insurance, and real estate .................... 6,976 7,747 7,810 154 2.1 127 1.7 63 .8

Finance ........................................................ 3,341 3,817 3,856 95 2.7 71 1.9 39 1.0

Depository institutions ................................... 2,019 2,066 2,080 9 .5 38 1.9 14 .7

Commercial banks ....................................... 1,457 1,442 1,451 –3 –.2 20 1.4 9 .6

Savings institutions ..................................... 262 259 262 –1 –.2 9 3.6 3 1.2

Nondepository institutions .............................. 543 746 802 41 6.6 59 8.6 56 7.5

Security and commodity brokers ..................... 567 743 710 35 5.6 –36 –4.6 –33 –4.4

Holding and other investment offices ............... 212 261 263 10 4.2 8 3.2 2 .8

Insurance ........................................................ 2,236 2,376 2,373 28 1.2 26 1.1 –3 –.1

Insurance carriers .......................................... 1,521 1,597 1,577 15 1.0 13 0.8 –20 –1.3

Insurance agents, brokers, and service ............ 715 779 796 13 1.7 13 1.7 17 2.2

Real estate ...................................................... 1,398 1,554 1,582 31 2.1 30 2.0 28 1.8

Services 1............................................................. 34,964 40,880 41,419 1,183 3.2 38 .1 539 1.3

 Agricultural services ......................................... 642 861 877 44 6.0 41 5.0 16 1.9

Hotels and other lodging places ......................... 1,730 1,810 1,796 16 .9 –107 –5.6 –14 –.8

Personal services ............................................ 1,185 1,274 1,288 18 1.5 12 1.0 14 1.1

Business services 1........................................... 7,495 9,312 9,312 363 4.4 –599 –6.0 0 .0

Services to buildings ...................................... 918 1,024 1,045 21 2.2 27 2.7 21 2.1

Personnel supply services .............................. 2,737 3,161 3,166 85 2.9 –701 –18.2 5 .2

Help supply services ................................... 2,428 2,829 2,853 80 3.1 –633 –18.3 24 .8

Computer and data processing services ........... 1,289 2,224 2,191 187 11.5 52 2.4 –33 –1.5

Auto repair, services, and parking ...................... 1,100 1,257 1,264 31 2.7 14 1.1 7 .6

Miscellaneous repair services ............................ 373 375 378 0 .1 3 .8 3 .8

Motion pictures ................................................ 533 575 588 8 1.5 –12 –2.0 13 2.3

Amusement and recreation services ................... 1,500 1,689 1,642 38 2.4 –55 –3.2 –47 –2.8

Health services 1............................................... 9,569 10,503 10,773 187 1.9 323 3.2 270 2.6

Offices and clinics of medical doctors .............. 1,699 2,024 2,087 65 3.6 68 3.5 63 3.1

Nursing and personal care facilities .................. 1,742 1,866 1,903 25 1.4 53 2.9 37 2.0

Hospitals ....................................................... 3,829 4,152 4,265 65 1.6 140 3.5 113 2.7

Home healthcare services ............................... 691 640 656 –10 –1.5 4 0.6 16 2.5

Legal services ................................................. 932 1,049 1,079 23 2.4 33 3.2 30 2.9

Private schools and other educational services ... 2,058 2,458 2,572 80 3.6 96 4.1 114 4.6

Social services 1............................................... 2,445 3,122 3,207 135 5.0 171 5.8 85 2.7

Child daycare services .................................. 568 722 728 31 4.9 17 2.4 6 .8

Residential care ............................................ 691 888 912 39 5.1 62 7.5 24 2.7

Museums and botanical and zoological gardens ... 87 110 106 5 4.8 2 1.9 –4 –3.6

Membership organizations ................................. 2,226 2,473 2,478 49 2.1 7 .3 5 .2

Engineering and management services 1.............. 2,889 3,619 3,670 146 4.6 101 2.9 51 1.4

Engineering and architectural services ............ 846 1,052 1,028 41 4.5 16 1.5 –24 –2.3

Management and public relations .................... 894 1,181 1,229 57 5.7 47 4.1 48 4.1

Government ......................................................... 19,434 21,096 21,364 332 1.7 462 2.2 268 1.3

Federal ........................................................... 2,727 2,618 2,655 –22 –.8 –1 0.0 37 1.4

Federal, except Postal Service ....................... 1,874 1,777 1,847 –19 –1.1 18 1.0 70 3.9

State .............................................................. 4,581 4,927 4,960 69 1.5 121 2.5 33 .7

State government, except education ............... 2,683 2,806 2,797 25 0.9 43 1.6 –9 –.3

State government education ........................... 1,898 2,121 2,163 45 2.2 78 3.8 42 2.0

Local .............................................................. 12,125 13,551 13,749 285 2.2 342 2.6 198 1.5

Local government, except education ............... 5,320 5,842 5,923 104 1.9 133 2.3 81 1.4

Local government education ........................... 6,805 7,709 7,825 181 2.5 209 2.8 116 1.5

1

Includes other industries not shown separately.
Monthly Labor Review February 2003 9

meant fewer business trips, as some companies substituted

lower-cost alternatives such as phone- and videoconferencing for face-to-face meetings. When business travel

was necessary, some businesses reduced associated expenses by requiring employees to plan ahead, fly coach class

or purchase tickets from discount airlines, and by limiting

travel allowances.19 Except for discount airlines—which cater to leisure travelers—most major airlines traditionally have

relied heavily on income generated from their sales of lastminute, unrestricted, business-class tickets. When businesses purchased cheaper, alternative tickets or avoided travel

altogether, the airline industry was forced to respond with its

own cutbacks.20

The September 11, 2001, terrorist attacks further aggravated airlines’ financial difficulties. After the attacks, fierce

competition for passengers drove down ticket prices and revenues; competitive pricing from discount carriers helped keep

ticket prices low in 2002. Additionally, after the terrorist attacks, passenger airlines lost a revenue source as new restrictions prevented them from carrying certain types of commercial cargo. Transport of U.S. mail, especially, declined.21

As these factors depressed airline revenues, the industry

was forced to concentrate on filling a greater proportion of

their seats in order to profit. In 2002, airlines needed to fill 80

percent of their seats to make a profit, whereas in 2000 they

only needed to fill 70 percent.22 Faced with decreased demand for air travel and financial losses, nearly all airline companies scaled-down the size of their active fleets, stored unneeded planes, and cut jobs.

The transportation services and hotel and other lodging

places industries also felt the effects of depressed levels of

travel. Employment in transportation services, which includes

travel agencies, contracted for the second consecutive year,

with 14,000 jobs lost in 2002. Reduced demand from business

travelers was an important factor driving this loss. The popularity of the Internet, which enables consumers to directly

purchase tickets, and cutbacks in the commissions that airlines traditionally paid to agents, further hurt travel agencies.23 Hotels and other lodging places lost 14,000 jobs in

2002. After reaching a high at the end of 2000, employment in

the hotel industry declined 6.3 percent by the end of 2002.

Similar to the airline industry, the downturn in lodging dates

from early 2001. Reduced business travel was a primary reason for reduced revenues at hotels, although the industry

suffered an additional blow as the September 11, 2001, terrorist attacks halted all types of travel across the Nation and

further drove down room rates.

Eating and drinking places and amusement and recreation services are industries whose fortunes also rely somewhat on travelers’ purchases. Eating and drinking places reduced their payrolls by 106,000 workers in 2002. Since reaching a peak in mid-2001, the industry has contracted 1.9 percent. A wide range of establishments are classified in eating

and drinking places, and it is difficult to know which factors

drove the industry trend; however, reduced travel is certainly

one negative factor that affected demand. Despite mild improvement in mid-2002, employment in amusement and recreation services ended the year down 47,000, declining for the

second consecutive year.

One additional result of the September 11, 2001, terrorist

attacks was passage of the Aviation and Transportation Security Act in November 2001, which led to the creation a new

Federal Government agency: the Transportation Security

Administration (TSA). This agency is responsible for securing the Nation’s transportation systems and, in 2002, it began

the process of federalizing security at U.S. airports. The

agency added 67,000 workers, the vast majority of whom are

responsible for screening passengers and baggage.24 Employment in Federal Government, excluding the postal service,

reflected these job gains with an over-the-year increase of

70,000. As airport security jobs were federalized, private security firms lost contracts to provide security services at

airports. Employment in detective, guard, and armored car

services reflected these lost contracts, as this industry lost

24,000 jobs. (See chart 2.) Although the terrorist attacks profoundly impacted airport security and other travel-related industries, as well as consumers’ willingness to spend money

on travel, consumers remained steadfast spenders on other

goods and services in 2002.

Low interest rates and growth in real earnings sparked consumer spending on certain big ticket items and drove employment gains in interest rate-sensitive industries. Interest

rates began falling in 2001, as the Federal Reserve Bank lowered its target Federal funds rate and began expanding the

money supply; for much of 2002, the Federal funds rate hovered near 1.75 percent.25 Mortgage rates also began falling in

2000, and dipped to a 40-year low in 2002.26

Low mortgage rates, coupled with real earnings growth,

boosted housing affordability and the demand for housing.27

Housing starts reached their highest level in more than 15

years,28 and residential general building contractors added

36,000 workers, while carpentry and floor work added 9,000

workers to meet the increased demand for housing. Although

these construction industries added workers in 2002, as mentioned earlier, they did not offset the decline in nonresidential

building, and so the overall construction industry lost jobs.29

Real estate gained 28,000 jobs, reflecting rising sales of

both new and existing homes.30 Minimal inflation, low mortgage rates, and appreciating home sales prices (up 7.1 percent

over the year) likely inspired some investors to transfer funds

from Wall Street to real estate.31 A bear market drove stock

prices lower, and the Standard and Poor’s 500 slipped 23 percent over the year. Employment in security and commodity
10 Monthly Labor Review February 2003

U.S. Labor Market, 2002

-30

-20

-10

0

10

20

30

-30

-20

-10

0

10

20

30

Guard services

Transportation Security Administration

SOURCE: Bureau of Labor Statistics, Current Employment Statistics Survey.

NOTE: Data are seasonally adjusted.

Chart 2. Monthly employment changes in detective, guard services, and the Transportation 

 Security Administration, 2001–02

Thousands

Jan.

2001

Thousands

Mar. July Nov. Jan.

2002

May Sept. Mar. May July Sept. Nov.

-10

-5

0

5

10

15

20

0

1

2

3

4

5

6

7

Mortgage bankers Refinance index

Chart 3. Employment in mortgage bankers and brokers and the average monthly Mortgage 

 Bankers Association of America refinance index, 1999–2002

Monthly employment changes

[thousands]

Refinance index

 [thousands]

NOTE: Data are seasonally adjusted.

SOURCE: Bureau of Labor Statistics, Current Employment Statistics Survey, and the Mortgage Bankers Association of America.

Jan.

1999

May Sept. Jan.

2000

May Sept. Jan.

2001

May Sept. Jan.

2002

May Sept.
Monthly Labor Review February 2003 11

brokers followed the market and declined by 33,000. Since

reaching a high in 2001, employment in this industry has decreased 9.8 percent. While employment in security and commodity brokers contracted, mortgage bankers and brokers

added 54,000 jobs over the year, driven by the historically low

mortgage rates and an accompanying 35-percent surge in refinancing activity.32 (See chart 3.) Overall, the finance, insurance, and real estate industry added 63,000 jobs.

Refinancing activity sparked more than employment

growth in mortgage bankers and brokers; it put extra money in

consumers’ pockets and, along with advances in real earnings, strengthened consumer spending. Consumer spending

grew 2.5 percent in 2002. Expenditures on furniture and household equipment grew by more than 8 percent and helped slow

the pace of job losses in household furniture manufacturing

from 33,000 in 2001 to just 3,000 in 2002.33

Consumer spending on motor vehicles and parts jumped

in the fourth quarter of 2001, and remained high throughout

2002.34 Auto dealers sold more than 17 million vehicles and

recorded strong sales for the fourth consecutive year, due in

part to consumer incentives, such as rebates and zero-percent financing, offered by auto manufacturers.35 Despite

strong sales, employment in motor vehicles and equipment

manufacturing declined by 14,000. This loss was an improvement over 2001, when the industry lost 80,000 jobs.

The major domestic auto manufacturers operated on thin

profit margins or losses partly as a result of competition from

foreign brands, which continued to expand their U.S. production base; expenses related to retiree pension funds; and labor costs which, by contract, were essentially fixed. The labor contracts—which required that workers receive pay

whether or not production lines were running—dissuaded

the Big 3 from reducing output.36 Meanwhile, the Big 3

automakers offered incentives to consumers in order to prop

up sales and maintain market share.37 Indeed, industrial production of motor vehicles and parts zoomed ahead 5.0 percent

as domestic auto manufacturers produced on average 13,000

more autos per month in 2002 than the prior year. 38 Besides

ramping up production, auto manufacturers reduced some of

their variable costs by placing downward pressure on the

prices they offered to suppliers.39 In this way, auto producers

transferred some of their industry’s weakness to auto-related

manufacturing industries, which produce vehicle inputs such

as automotive stampings or electrical equipment for engines.40

Collectively, these industries lost 15,000 jobs in 2002, about

half the jobs they had lost in the prior year.

Total retail sales excluding motor vehicles and parts were

also strong, as they rose 3.6 percent over the year. The retail

trade industry, however, shed 184,000 jobs.41 Eating and

drinking places accounted for the majority of job losses, although department stores lost 42,000 jobs and food stores

lost 63,000 jobs. In 2002, department stores continued to benefit from technological and managerial innovations that have

improved their efficiency and reduced labor costs in recent

years.42 Food stores benefited from recent innovations, too,

although they also suffered as warehouse clubs and

superstores provided fierce competition, and chipped away

at food stores’ traditional markets.43

Demographic trends supported job growth in health services and education. Health services hired more workers

(270,000) than any other industry in 2002, as its employment

grew 2.6 percent. Aging baby-boomers, population growth, and

technological advances generated increased demand for

healthcare services. Hospitals accounted for the largest share

of the job growth, with 113,000 hires, while offices and clinics of

medical doctors added 63,000 workers to their payrolls. Employment in hospitals grew 2.7 percent in 2002, compared with

average annual growth of 1.6 percent from 1996 to 2001. This

accelerated growth is likely linked to a loosening of labor markets in 2001 and 2002. Acute shortages of workers—in both

specialized and nonspecialized occupations—have plagued the

industry in recent years, and the overall weakening of the labor

market has allowed them to reduce the shortages.44

As in health services, employment growth in public and

private education was largely driven by demographic trends.

Enrollment in public elementary and secondary schools has

increased each year since 1985, as the baby-boom echo and

immigration have added to the numbers of school-aged children.45 In 2002, employment in local government education

expanded by 1.5 percent, and private elementary and secondary schools employment grew by 1.9 percent.

Employment in higher education also expanded; State

Government education, which consists largely of 2- and 4-

year colleges, added 2.0 percent more jobs, whereas private

colleges and universities added 6.6 percent more jobs. Although State Government education continued to expand in

2002, its rate of job growth slowed compared with its 2.2-

percent average from 1996 to 2001. Many State colleges and

universities faced severe budget crunches in 2002, as States

collected fewer tax dollars and subsequently reduced funding for education.46

Unemployment rose slightly in 2002. Data from the Current

Population Survey (CPS) showed that a total of 8.4 million

persons were unemployed at yearend, up by about one-half

million over the year, and the national unemployment rate was

5.9 percent, 0.3 percentage point higher than in the fourth

quarter of 2001. The unemployment rate trended upward fairly

steadily following the onset of the recent recession in March

2001, and reached 5.9 percent in the second quarter of 2002. It

then showed little definitive movement until late in the year. It
12 Monthly Labor Review February 2003

U.S. Labor Market, 2002

should be noted that at the end of 2002, the jobless rate was

still relatively low in comparison to the rates reached during

the labor market downturns of recent decades.47 (See chart 4.)

Total employment, as measured in the household survey,

fell in the first quarter of 2002, but subsequently rose slowly

over the remainder of the year. The number of employed persons was slightly higher in the fourth quarter of 2002 than in

the fourth quarter of 2001.48 The rise in employment did not

keep pace with the rise in the civilian noninstitutional population, and as a result, the employment-population ratio fell by

0.6 percentage point over the year to 62.5 percent.

Adult women (those 20 years or older) fared somewhat

better in the labor force than adult men or teenagers in 2002.

Employment among adult women rose by nearly 500,000 over

the year, while there was a decline of nearly 100,000 among

adult men. (See table 2.) By the end of the year the number of

unemployed adult women—those without a job but available

and actively looking for work—had edged up by 166,000, but

joblessness increased by more than twice this amount among

adult men. While the jobless rate for adult women rose only

slightly (0.2 percent), the rate for adult men rose by 0.5 percentage point over the year. The labor force participation rate

for adult women remained unchanged in 2002; the participation rate for adult men dropped by 0.6 percentage point.

The rapidly deteriorating labor market conditions faced by

teenagers in 2001 eased somewhat in 2002. The unemployment rate for teens reached 17.1 percent in the second quarter

of the year, but then edged down to 15.8 percent in the fourth

quarter, leaving the rate unchanged over the year. 49 The slight

improvement in teenage joblessness in the second half of

2002 was tempered by the fact that fewer teens were engaged

in labor market activity. The teenage civilian labor force decreased by 364,000 in 2002, and the teen labor force participation rate dropped by 2.0 percentage points to 47.1 percent.

This is the lowest this rate has been among teenagers since

the third quarter of 1965. Another sign of the difficult labor

market conditions faced by teenagers is reflected in the change

in the employment level for this group, which fell over the

year, by some 311,000.

As with the overall labor market situation in 2002, the employment situation of whites, blacks, and Hispanics worsened just slightly over the year. Among blacks, unemployment rose by 167,000, and the unemployment rate for blacks

rose by 0.9 percentage point to 10.8 percent in the fourth

quarter of 2002. The labor force participation rate for blacks

dropped by 0.4 percentage point to 64.7 percent.

Unemployment among whites rose by 255,000 in 2002, and

their unemployment rate rose by 0.2 percentage point, to 5.1

1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002

0

2

4

6

8

10

12

0

2

4

6

8

10

12

Percent

 NOTE: Shaded regions represent recessions as designated by the National Bureau of Economic 

Research. Data are quarterly.

 SOURCE: Bureau of Labor Statistics, Current Population Survey.

Percent

Chart 4. Unemployment rate, seasonally adjusted, 1969–2002
Monthly Labor Review February 2003 13

Employment status of the civilian noninstitutional population 16 years and older, by selected characteristics,

quarterly averages, seasonally adjusted, 1999–2002

[Numbers in thousands]

 Total

Civilian labor force ............................................... 140,036 141,257 142,291 141,868 142,605 142,761 142,799 508

Participation rate ............................................. 67.1 67.1 66.9 66.5 66.7 66.6 66.5 –.4

Employed .......................................................... 134,292 135,649 134,308 133,894 134,149 134,568 134,364 56

Employment-population ratio .............................. 64.4 64.4 63.1 62.8 62.8 62.8 62.5 –.6

Unemployed ....................................................... 5,744 5,609 7,983 7,975 8,456 8,193 8,436 453

Unemployment rate .......................................... 4.1 4.0 5.6 5.6 5.9 5.7 5.9 .3

Men, 20 years and older

Civilian labor force ............................................... 70,481 71,230 71,954 71,658 72,271 72,283 72,198 244

Participation rate ............................................. 76.6 76.6 76.5 76.0 76.5 76.3 75.9 –.6

Employed .......................................................... 68,099 68,803 68,322 67,996 68,410 68,521 68,226 –96

Employment-population ratio .............................. 74.0 73.9 72.6 72.1 72.4 72.3 71.7 –.9

Unemployed ....................................................... 2,382 2,427 3,632 3,662 3,861 3,762 3,972 340

Unemployment rate .......................................... 3.4 3.4 5.0 5.1 5.3 5.2 5.5 .5

 Women, 20 years and older

Civilian labor force ............................................... 61,173 61,703 62,357 62,360 62,601 62,767 62,985 628

Participation rate ............................................. 60.8 60.8 60.9 60.8 60.8 60.8 60.9 .0

Employed .......................................................... 58,959 59,597 59,265 59,305 59,329 59,636 59,727 462

Employment-population ratio .............................. 58.6 58.7 57.9 57.8 57.6 57.8 57.7 –.2

Unemployed ....................................................... 2,214 2,106 3,092 3,054 3,272 3,131 3,258 166

Unemployment rate .......................................... 3.6 3.4 5.0 4.9 5.2 5.0 5.2 .2

 Both sexes, 16 to 19 years

Civilian labor force ............................................... 8,382 8,324 7,980 7,851 7,733 7,711 7,616 –364

Participation rate ............................................. 52.0 52.1 49.1 48.2 47.7 47.6 47.1 -2.0

Employed .......................................................... 7,235 7,249 6,721 6,592 6,410 6,411 6,410 –311

Employment-population ratio .............................. 44.9 45.3 41.4 40.4 39.5 39.6 39.6 –1.8

Unemployed ....................................................... 1,147 1,075 1,259 1,258 1,323 1,300 1,206 –53

Unemployment rate .......................................... 13.7 12.9 15.8 16.0 17.1 16.9 15.8 .0

 White

Civilian labor force ............................................... 116,933 117,748 118,492 118,130 118,644 118,873 118,643 151

Participation rate ............................................. 67.3 67.3 67.1 66.8 67.0 67.0 66.7 –.4

Employed .......................................................... 112,839 113,671 112,639 112,265 112,457 112,766 112,536 –103

Employment-population ratio .............................. 65.0 64.9 63.8 63.5 63.5 63.5 63.3 –.5

Unemployed ....................................................... 4,094 4,077 5,852 5,865 6,188 6,106 6,107 255

Unemployment rate .......................................... 3.5 3.5 4.9 5.0 5.2 5.1 5.1 .2

 Black

Civilian labor force ............................................... 16,504 16,700 16,756 16,758 16,883 16,808 16,906 150

Participation rate ............................................. 66.0 65.8 65.1 64.9 65.2 64.6 64.7 –.4

Employed .......................................................... 5,175 15,460 15,102 15,073 15,080 15,179 15,085 –17

Employment-population ratio .............................. 60.7 60.9 58.7 58.4 58.2 58.4 57.8 –.9

Unemployed ....................................................... 1,329 1,239 1,654 1,685 1,803 1,629 1,821 167

Unemployment rate .......................................... 8.1 7.4 9.9 10.1 10.7 9.7 10.8 .9

 Hispanic origin

Civilian labor force ............................................... 14,896 15,566 15,967 15,969 16,129 16,279 16,275 308

Participation rate ............................................. 67.9 68.6 68.2 67.7 67.8 67.8 67.3 –.9

Employed .......................................................... 13,994 14,697 14,776 14,770 14,933 15,058 15,001 225

Employment-population ratio .............................. 63.8 64.8 63.1 62.6 62.7 62.7 62.0 –1.1

Unemployed ....................................................... 902 869 1,191 1,199 1,196 1,221 1,273 82

Unemployment rate .......................................... 6.1 5.6 7.5 7.5 7.4 7.5 7.8 .3

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

1999 2000 2001 2002

IV IV

Change,

 IV 2001 to

 IV 2002 IV IV I II III

Characteristic

are included in both the white and black population groups.

SOURCE: Bureau of Labor Statistics, Current Population Survey.

Table 2.
14 Monthly Labor Review February 2003

U.S. Labor Market, 2002

percent by the fourth quarter. Employment among whites

decreased slightly over the year, due mainly to a decrease in

employment of adult men (–169,000) and teenagers (–263 ,000).

The year 2002 marked a milestone of sorts for Hispanics in

the U.S. labor force. Over the year, the number of employed

Hispanics rose by 225,000 to 15 million. With this increase,

Hispanic employment rose to about the same as the number

of employed blacks.50 The rise in Hispanic employment,

driven by the long-term rise in the Hispanic population, was

spread fairly evenly between adult men and adult women.

There also were 82,000 additional unemployed Hispanics by

the fourth quarter, however, and this corresponded with a 0.3-

percentage point rise in their unemployment rate, which ended

the year at 7.8 percent.

Workers at all education levels were affected by the recent

labor market downturn, including those who have attained

college-level training. During the 2001–02 labor market

downturn, a great deal of media attention was focused on

troubles in the “high tech” sector. 51 This field typically employs more highly educated workers, leading to speculation

that the recent recession may have had a greater effect on

such workers than past recessionary periods. The data suggest that the full story is somewhat more complex than indicated by some news stories.52 The rise in the unemployment

rate among more highly educated workers during the recent

recession largely resembles that of past recessions.53 However, when compared with the somewhat milder changes in

the unemployment rates of less well-educated groups, it appears that workers with more education did fare relatively

worse in the most recent downturn.

Since the start of the recent recession in the first quarter of

2001, the unemployment rate for those with less than a high

school education increased by 2.1 percentage points to 9.1

percent. At the same time, the unemployment rate for those

with a high school education but no college training rose 1.3

percentage points to 5.1 percent. These changes represented

unemployment rate increases of about one-third since the first

quarter of 2001. In contrast, during the same period, the unemployment rate of those with some college training expanded

by more than two-thirds, increasing by 1.9 percentage points

to 4.7 percent, while the rate for college graduates almost

doubled, adding 1.3 percentage points by the end of 2002,

reaching 3.0 percent. (See table 3.)

The comparatively moderate unemployment rate change

among workers with less education is consistent with the relatively “mild” nature of the recent downturn.54 This is particularly noteworthy, given the low unemployment rates for the

less educated when the recession began. The strong job

markets of the late 1990s had brought rates for the less educated close to record lows. The small rise in the jobless rates

during the subsequent labor market slowdown suggests that

success in the job market during the expansion among at least

some of the less educated may have had some staying power.

(See chart 5.)

Employment growth occurred among those in service occupations; these gains were substantially offset by losses, particularly among operators, fabricators, and laborers as well

as those in precision production, craft, and repair jobs. Employment in service occupations rose by 741,000 over the

year, concentrated mainly in the health services and food

preparation fields. Women accounted for the majority of the

increase in these fields. Employment in farming, forestry, and

fishing also rose, with 205,000 jobs added in 2002, mostly in

farming. Most of this increase was among men. Hispanics

account for a disproportionately large portion of farm workers

(20.4 percent in the fourth quarter of 2002), and over the year,

they made up roughly two-fifths of the employment increase

in this category. (See table 4.)

Employment declined over the year among operators, fabricators, and laborers (–323,000) as well as within precision

production, craft, and repair occupations (–389,000). Most of

the job losses in these fields were among men. Declines within

operator, fabricator, and laborer occupations were concentrated among machine operators, assemblers, and inspectors

(–272,000) and handlers, equipment cleaners, helpers, and laborers (–169,000). Employment also fell in technical, sales,

and administrative support occupations (–137,000). Employment losses in this area were concentrated among women,

who shed 475,000 jobs in administrative support, including

clerical occupations.

Unemployment: why and how long? The number of people

who were unemployed because they had lost their jobs (as

opposed to those who have recently entered the job market or

those who have quit their jobs) rose between the fourth quarters of 2001 and 2002, by 244,000. The increase in job losers

reflects the net effect of a 370,000 rise in the number of those

whose job loss was thought to be permanent, and a 127,000

decline among workers on temporary layoff. The recession of

the early 1990s was the first downturn in which the portion of

the increase in job losers due to permanent job loss was dramatically larger than the portion due to temporary layoff. This

pattern continued in the recent labor market downturn, with

the disparity becoming even more striking.55

The number of unemployed who newly entered the labor

force remained little changed over the year, a sign that difficult labor market conditions may have encouraged many, especially youth, to otherwise occupy themselves for the time

being.56 Many were unable to delay the pursuit of employment, however, as evidenced by the number of unemployed

reentrants—persons who previously worked but were out of

the labor force prior to beginning their job search—which
Monthly Labor Review February 2003 15

Employment status of the civilian noninstitutional population 25 years and older by educational attainment,

quarterly averages, seasonally adjusted, 1999–2002

[Numbers in thousands]

IV IV IV I II III

Total civilian noninstitutional population ........................ 174,456 175,921 177,481 177,822 178,290 178,738 179,228 1,747

Less than a high school diploma

Civilian noninstitutional population1.............................. 28,206 27,825 27,548 27,785 28,111 26,953 27,069 –479

Percent of total population .................................. 16.2 15.8 15.5 15.6 15.8 15.1 15.1 –.4

Civilian labor force................................................... 12,103 12,033 12,123 12,157 12,340 11,777 11,920 –203

Percent of population ......................................... 42.9 43.2 44.0 43.8 43.9 43.7 44.0 .0

Employed .............................................................. 11,332 11,256 11,126 11,165 11,297 10,796 10,830 –296

Employment-population ratio ................................ 40.2 40.5 40.4 40.2 40.2 40.1 40.0 –.4

Unemployed .......................................................... 770 777 997 991 1,043 981 1,090 93

Unemployment rate............................................. 6.4 6.5 8.2 8.2 8.5 8.3 9.1 .9

 High school graduates, no college2

Civilian noninstitutional population(1) ........................... 57,551 57,609 57,380 57,432 57,012 57,629 58,169 789

Percent of total population .................................. 33.0 32.7 32.3 32.3 32.0 32.2 32.5 .2

Civilian labor force................................................... 37,428 37,159 36,829 36,710 36,644 37,295 37,214 385

Percent of population .......................................... 65.0 64.5 64.2 63.9 64.3 64.7 64.0 –.2

Employed ............................................................. 36,180 35,860 35,044 34,766 34,580 35,414 35,301 257

Employment-population ratio ................................ 62.9 62.2 61.1 60.5 60.7 61.5 60.7 –.4

Unemployed .......................................................... 1,247 1,299 1,785 1,944 2,064 1,881 1,913 128

Unemployment rate ............................................. 3.3 3.5 4.8 5.3 5.6 5.0 5.1 .3

 Less than a bachelor’s degree3

Civilian noninstitutional population1.............................. 43,975 44,711 45,395 45,173 44,703 45,525 45,979 584

Percent of total population .................................. 25.2 25.4 25.6 25.4 25.1 25.5 25.7 .1

Civilian labor force ................................................... 32,402 32,955 33,438 33,098 32,865 33,315 33,455 17

Percent of population .......................................... 73.7 73.7 73.7 73.3 73.5 73.2 72.8 –.9

Employed .............................................................. 31,554 32,117 32,054 31,714 31,303 31,816 31,880 –174

Employment-population ratio ................................ 71.8 71.8 70.6 70.2 70.0 69.9 69.3 –1.3

Unemployed .......................................................... 848 838 1,384 1,384 1,561 1,499 1,576 192

Unemployment rate............................................. 2.6 2.5 4.1 4.2 4.8 4.5 4.7 .6

 College graduates

Civilian noninstitutional population1.............................. 44,724 45,776 47,158 47,432 48,464 48,632 48,011 853

Percent of total population .................................. 25.6 26.0 26.6 26.7 27.2 27.2 26.8 .2

Civilian labor force................................................... 35,609 36,188 37,194 37,577 38,279 37,947 37,763 569

Percent of population .......................................... 79.6 79.1 78.9 79.2 79.0 78.0 78.7 –.2

Employed .............................................................. 34,992 35,621 36,112 36,509 37,149 36,873 36,630 518

Employment-population ratio ................................ 78.2 77.8 76.6 77.0 76.7 75.8 76.3 –.3

Unemployed .......................................................... 617 567 1,082 1,068 1,130 1,074 1,132 50

Unemployment rate ............................................. 1.7 1.6 2.9 2.8 3.0 2.8 3.0 .1

1

 The population figures are not adjusted for seasonal variation.

2

 Includes high school diploma or equivalent.

 Change,

IV 2001 to

 IV 2002

1999 2000 2001

IV

Educational attainment

Table 3.

3

 Includes the categories some college, no degree, and associate degree.

SOURCE: Bureau of Labor Statistics, Current Population Survey.

2002

rose by 174,000 to 2.4 million. Unemployment among those

who voluntarily left their jobs changed little over the year.

(See table 5.)

Because the job market remained slack during 2002, many

people were unemployed for long periods of time. The average (mean) duration of unemployment rose by 3.9 weeks between the fourth quarter of 2001 and the fourth quarter of

2002, to 17.9 weeks. The number of people who had been

unemployed for 27 weeks or more rose to 1.7 million from 1

million.

Alternative measures of labor market underutilization indicated modest change in other types of labor market difficulties during the year. The official unemployment rate is not the

only measure of the extent to which labor resources are being

underutilized. The Bureau of Labor Statistics has developed a

range of alternative measures of labor underutilization that

can be used to supplement the jobless rate and shed further

light on the extent to which labor resources are being utilized.

Table 6 shows alternative measures U-1 through U-6 over the

past year. Like the official unemployment rate (U-3, not sea-
16 Monthly Labor Review February 2003

U.S. Labor Market, 2002

Median

usual

weekly

earnings

Total Men Women

Occupation

 2001

 IV

 2002

IV

 2001

IV

Change,

 IV 2001

to IV 2002

 2002

IV

Change,

 IV 2001

 to IV 2002

 2002

IV

 2001

 IV

Change,

IV 2001

to IV 2002

Table 4. Employment by occupation and sex, fourth quarter, 2001–02, and median usual weekly earnings by

occupation, annual average, 2002

[Employment in thousands]

Total, 16 years and older ................. $610 134,497 134,609 112 71,595 71,432 –163 62,903 63,178 275

Managerial and professional specialty ... 884 42,044 42,058 14 20,814 20,661 –153 21,230 21,397 167

Executive, administrative, and

managerial .................................... 891 20,250 20,266 16 10,807 10,923 116 9,443 9,343 –100

Professional specialty ....................... 879 21,794 21,793 –1 10,007 9,739 –268 11,787 12,054 267

Technical, sales, and administrative

support .......................................... 551 38,687 38,550 –137 13,919 14,025 106 24,767 24,525 –242

Technicians and related support ......... 693 4,416 4,558 142 1,985 2,078 93 2,431 2,480 49

Sales occupations ............................ 602 15,926 16,169 243 8,032 8,090 58 7,894 8,079 185

Administrative support, including

clerical ......................................... 503 18,345 17,823 –522 3,903 3,857 –46 14,442 13,967 –475

Service occupations ........................... 385 18,305 19,046 741 7,320 7,540 220 10,985 11,506 521

Private household ............................. 277 707 772 65 19 43 24 688 729 41

Protective service ............................. 647 2,531 2,627 96 2,000 2,087 87 531 541 10

Service, except private household

and protective service .................... 355 15,067 15,646 579 5,301 5,410 109 9,766 10,236 470

Precision production, craft, and repair .. 633 14,683 14,294 –389 13,445 13153 –292 1,238 1,141 –97

Operators, fabricators, and laborers ..... 484 17,632 17,309 –323 13,596 13,354 –242 4,036 3,955 –81

Machine operators, assemblers,

and inspectors .............................. 476 6,530 6,258 –272 4,265 4,094 –171 2,265 2,164 –101

Transportation and material moving ..... 581 5,609 5,728 119 5,029 5,088 59 580 640 60

 Handlers, equipment cleaners, helpers,

and laborers .................................. 401 5,493 5,324 –169 4,301 4,172 –129 1,192 1,151 –41

Farming, forestry, and fishing ............... 364 3,147 3,352 205 2,501 2,699 198 646 653 7

SOURCE: Bureau of Labor Statistics, Current Population Survey.

Chart 5. Unemployment rates of persons ages 25 to 64 by educational attainment, 1970–2002

Percent Percent

 NOTE: Since 1992, data on educational attainment have been based on the "highest diploma or degree received" rather than the "number of years

of school completed." Data from 1994 forward are not directly comparable with data for 1993 and earlier years due to the CPS redesign. Data for 1970–

1991 are from the March supplement to the CPS. Data from 1992–2002 are fourth-quarter data. Shaded regions represent recessions as designated

by the National Bureau of Economic Research.

 SOURCE: Bureau of Labor Statistics, Current Population Survey.

1970 72 74 76 78 80 82 84 86 88 90 92 94 96 98 2000 02

0

2

4

6

8

10

12

14

16

18

0

2

4

6

8

10

12

14

16

18

 Less than a

high school diploma

High school diploma, no college

Some college 

or an associate's degree

College degree
Monthly Labor Review February 2003 17

sonally adjusted), most of these measures pointed to only

modest worsening in labor market conditions over the year.

The measure that showed the most sizeable increase was U-1,

which shows persons unemployed 15 weeks or more as a

percent of the civilian labor force. The rise in this measure,

combined with the relatively stable number of unemployed

persons, indicated that, as noted earlier, although unemployment rose only slightly in 2002, the weakness in the job market

made it increasingly difficult for those who do not have jobs

to find work. (See table 6.)

During 2002, the median weekly earnings of full-time

wage and salary workers rose only slightly more than

consumer prices. During most of the 1990s expansion,

Unemployed persons by reason for and duration of unemployment, quarterly averages, seasonally adjusted,

1999–2002

[Numbers in thousands]

II II III

 Reason for unemployment

Job losers and persons who completed

temporary jobs ............................................... 2,495 2,508 4,430 4,317 4,567 4,559 4,674 244

On temporary layoff ....................................... 817 881 1,184 1,099 1,082 1,125 1,057 –127

Not on temporary layoff ................................. 1,677 1,628 3,246 3,218 3,485 3,434 3,616 370

Job leavers ...................................................... 802 772 879 873 918 808 843 –36

Reentrants ....................................................... 1,984 1,899 2,224 2,310 2,414 2,302 2,398 174

New entrants .................................................... 468 433 486 507 534 572 524 38

 Duration of unemployment

Less than 5 weeks ............................................ 2,593 2,497 3,066 2,961 2,800 2,828 2,801 –265

5 to 14 weeks ................................................... 1,748 1,772 2,606 2,504 2,711 2,469 2,486 –120

15 weeks and over ............................................ 1,383 1,306 2,256 2,598 2,970 2,855 3,076 820

15 to 26 weeks ................................................ 691 689 1,213 1,386 1,370 1,324 1,327 114

27 weeks and over ........................................... 692 617 1,044 1,213 1,600 1,531 1,749 705

Average (mean) duration, in weeks ...................... 13.0 12.4 14.0 15.0 17.0 16.8 17.9 3.9

Median duration, in weeks .................................. 6.1 6.0 7.7 8.3 10.1 8.8 9.5 1.8

SOURCE: Bureau of Labor Statistics, Current Population Survey.

Reason and duration 1999

 IV

 2000

IV

 Change,

 IV 2001

 to IV 2002

 2001

 IV

2002

Table 5.

IV

Range of alternative measures of labor underutilization, quarterly averages, not seasonally adjusted,

1999–2002

1999 2000 2001 2002

 IV IV IV I II III IV

U–1 Persons unemployed 15 weeks or longer,

as a percent of the civilian labor force ............... .9 .9 1.5 2.0 2.1 1.9 2.0 0.5

U–2 Job losers and persons who completed

temporary jobs, as a percent of

the civilian labor force ...................................... 1.7 1.6 2.9 3.6 3.0 3.0 3.1 .2

U–3 Total unemployed, as a percent of the civilian

labor force (official unemployment rate) ............. 3.8 3.7 5.2 6.2 5.8 5.7 5.6 .4

U–4 Total unemployed plus discouraged workers,

as a percent of the civilian labor force plus

discouraged workers ........................................ 4.0 3.9 5.5 6.4 6.0 5.9 5.8 .3

U–5 Total unemployed, plus discouraged workers,

plus all other marginally attached workers, as a

percent of the civilian labor force plus all

marginally attached workers .............................. 4.6 4.4 6.1 7.1 6.7 6.6 6.5 .4

U–6 Total unemployed, plus all marginally attached

workers, plus total employed part time for

economic reasons, as a percent of the civilian

labor force plus all marginally attached workers ... 6.8 6.6 9.0 10.1 9.5 9.5 9.3 .3

SOURCE: Bureau of Labor Statistics, Current Population Survey.

 Change,

 IV 2001

 to IV 2002

Measure

Table 6.
18 Monthly Labor Review February 2003

U.S. Labor Market, 2002

real earnings increased for most worker groups. With the

onset of the recession in 2001, earnings increases slowed

somewhat. Earnings gains were even smaller in 2002. Over

the year, the median weekly earnings of full-time wage and

salary workers, as derived from the CPS, were $610, representing an increase of 2.2 percent from a year earlier.5 7

This was slightly higher than the 1.6-percent rise in the

Consumer Price Index for All Urban Consumers (CPI-U )

over the same period. (See table 7.)

Median weekly earnings of women increased at a faster

pace than those of men in 2002—3.9 versus 1.9 percent.

Over the year, the ratio of women’s earnings to men’s increased to 78 percent, up from 76 percent a year earlier.

Since 1979, when the Bureau of Labor Statistics began

regularly collecting information on usual median weekly

earnings in the CPS, the ratio of women’s to men’s earnings has increased by 15 percentage points. It is important to remember that many factors may underlie the disparity between the earnings of men and women: differences in work schedules, educational attainment, length

of experience in the workforce, occupational and industry

makeup of each group, and discrimination, for example.

Among the race and ethnic groups, earnings increased

by about the same degree for each group. Between 2001

and 2002, median weekly earnings for blacks rose by 2.5

percent to $499, and whites’ earnings increased by 2.5 percent over the year to $627. Hispanic earnings grew by 2.4

percent over the year, to $424.

Median weekly earnings increased for workers in all

four major educational groups in 2002, although earnings

growth was comparably slower for workers who had at

least some college education. Earnings increased the most

(3.5 percent) among high school graduates with no college training, whose earnings reached $538 in 2002. Median weekly earnings among persons with less than a high

school education rose by 2.6 percent, ending the year at

$388. Earnings among workers with some college experience or an associate’s degree roughly kept pace with inflation in 2002, rising by 1.6 percent to $631, while college

graduates’ earnings increased by 2.1 percent to $943.

Characteristic Percent change,

 2001–02 2001 2002

SOURCE: Bureau of Labor Statistics, Current Population Survey.

Table 7. Median usual weekly earnings of full-time wage and salary workers

by selected characteristics, annual averages 2001–02

Total, 16 years and older1.............................................. $597 $610 2.2 

Executive, administrative, and managerial occupations .... 867 891 2.8

Professional specialty occupations ................................ 854 879 2.9

Technicians and related support .................................... 673 693 3.0

Sales occupations ....................................................... 574 602 4.9

Administrative support, incuding clerical ......................... 486 503 3.5

Private household workers ............................................ 255 277 8.6

Protective service occupations ..................................... 629 647 2.9

Service, except private household and protective ............ 349 355 1.7

Precision production, craft, and repair ............................ 629 633 0.6

Machine operators, assemblers, and inspectors .............. 457 476 4.2

Transportation and material moving occupations .............. 573 581 1.4

Handlers, equipment cleaners, helpers, and laborers ....... 389 401 3.1

Farming, forestry, and fishing occupations ...................... 354 364 2.8

Men ........................................................................... 672 685 1.9

Women ....................................................................... 511 531 3.9

White ......................................................................... 612 627 2.5

Men ........................................................................ 694 709 2.2

Women .................................................................... 521 550 5.6

Black ......................................................................... 487 499 2.5

Men ........................................................................ 518 524 1.2

Women .................................................................... 451 474 5.1

Hispanic origin ............................................................ 414 424 2.4

Men ........................................................................ 438 453 3.4

 Women .................................................................... 385 396 2.9

Less than a high school diploma1.................................. 378 388 2.6

High school graduates, no college1................................ 520 538 3.5

Some college or associate degree1................................ 621 631 1.6

College graduates, total1.............................................. 924 943 2.1

1 Earnings figures by educational attainment pertain to persons age 25 and older.

During the expansion of the

1990s, earnings expanded at a

brisk rate for many worker

groups.58 Even low-paid workers

saw their earnings improve, especially during the latter part of the

expansion. Between 1996 and

1999, the weekly earnings of fulltime workers with earnings near

the bottom of the distribution—

those with earnings at the first

decile—grew by an average of

about 3.0 percent per year (after

adjusting for inflation) over that 3-

year period.59 This was roughly

in line with the earnings growth

experienced by those near the top

of the distribution of weekly earnings—those with earnings at the

ninth decile. Between 1999 and

2002, however, the rate of growth

for the low-paid workers slowed to

a standstill, undoubtedly reflecting the onset of the recession in

2001. Earnings advances among

highly-paid workers also slowed

over this period, though the weekly

earnings of those at the ninth

decile continued to grow through

2002. (See table 8.)
Monthly Labor Review February 2003 19

Jobless rates continued to climb in most parts of the country

in 2002, while falling in some parts. In the places where

they rose, the increases were generally more moderate than

in 2001. Unemployment rates moved upward, on net, in 6 of

the 9 census geographic divisions in 2002.60 (See table 9.)

However, for no division was the jobless rate increase larger

than it had been in 2001. The most marked improvement relative to the previous year came in the most populous division—the South Atlantic—where the 2002 decline of 0.2 percentage point followed a 2001 rise of 1.5 points. The relative

improvement was least in the Middle Atlantic division, where

the 0.6-percentage point increase in 2002 followed a full-point

rise in 2001.

Almost all geographic divisions saw their payroll employment decline in 2002. However, job losses were relatively more

severe for the divisions in the Midwest and Northeast than

those in the South and West. The Middle Atlantic and New

England divisions experienced the largest unemployment rate

increases, 0.6 percentage point each, while shedding jobs at

rates of 0.5 and 0.6 percent, respectively. Meanwhile, the most

sizeable unemployment rate decline, –0.4 percentage point in

the East South Central division, was associated with the only

divisional employment gain, however slight.

The Pacific continued to report the highest divisional unemployment rate, 6.6 percent in the fourth quarter of 2002, as it

has for 11 consecutive years. The West North Central diviThe Local Area Unemployment Statistics (LAUS)

program uses multiple methodologies to produce

monthly estimates of civilian labor force, employment, unemployment, and unemployment rate for

areas below the national level, including census

regions and divisions, the States and the District

of Columbia, and metropolitan areas. The same

concepts that are used in the Current Population

Survey (CPS) for the Nation as a whole are applied

in the LAUS methodologies, so that data are comparable across geographic levels.

The LAUS methodologies vary by the availability of inputs, which tends to reflect differences in

geographic level. A signal-plus-noise modeling

approach is used for areas where data from the

CPS can reliably serve as inputs. Model-based

areas include the States and the District of Columbia. Estimates for regions and divisions are aggregated from the model-based estimates for their

constituent States. Due to the methodological

differences, estimates for regions and divisions

may not sum to those for the United States. Metropolitan area estimates are developed through a

building block approach where categories of unemployed workers are classified based on their

previous status with respect to the labor force,

and controlled to State totals. Both the model and

building block approaches incorporate administrative data from the Unemployment Insurance

(UI) systems and establishment payroll data produced by other BLS programs.

Local Area Unemployment Statistics (LAUS) program methodologies

Quartiles and selected deciles of usual weekly

earnings of full-time wage and salary workers

16 years and older, annual averages 1992–2002

[In constant 2002 dollars]

1992 .................. 271 374 554 828 1,174

1993 .................. 273 373 564 837 1,200

1994 .................. 264 368 561 843 1,196

1995 .................. 266 366 562 843 1,198

1996 .................. 266 364 559 843 1,209

1997 .................. 270 368 562 849 1,239

1998 .................. 282 382 576 870 1,273

1999 .................. 290 394 593 892 1,307

2000 .................. 292 397 602 900 1,322

2001 .................. 295 402 606 912 1,367

2002 .................. 296 406 610 926 1,381

Upper limit of:

First

decile

First

quartile

Third

quartile

Second

quartile

 (median)

Ninth

decile

Year

Table 8.

 NOTE: The Consumer Price Index research series using current methods (CPI-U-RS) is used to convert dollars to constant dollars. Ten percent of

all full-time wage and salary workers earn less than the upper limit of the first

decile; 25 percent earn less than the upper limit of the first quartile; 50

percent earn less than the upper limit of the second quartile, or median; 75

percent earn less than the upper limit of the third quartile; and 90 percent

earn less than the upper limit of the ninth decile. This chart provides data for

1992 forwards becuase the labor market difficulties of the early 1990s

tapered off in 1992 and the job market expansion of the 1990s began that

year. Data for years prior to 1994 are not strictly comparable, due to the

1994 redesign of the Current Population Survey.

 SOURCE: Bureau of Labor Statistics, Current Population Survey.
20 Monthly Labor Review February 2003

U.S. Labor Market, 2002

Unemployment rates for regions and divisions, seasonally adjusted quarterly averages, 2001–02

I II III

Northeast region ............................................... 5.0 5.2 5.4 5.3 5.5 .5

New England division ...................................... 4.2 4.1 4.3 4.6 4.8 .6

Middle Atlantic division .................................... 5.2 5.6 5.8 5.6 5.8 .6

Midwest region .................................................. 5.0 5.2 5.4 5.3 5.2 .2

East North Central division .............................. 5.4 5.7 5.8 5.8 5.7 .3

West North Central division .............................. 4.1 4.2 4.3 4.3 4.2 .1

South region ..................................................... 5.4 5.4 5.5 5.4 5.4 .0

South Atlantic division .................................... 5.2 5.2 5.3 5.1 5.0 –.2

East South Central division .............................. 5.7 5.6 5.5 5.3 5.3 –.4

West South Central division ............................. 5.5 5.5 5.8 5.8 5.9 .4

West region ...................................................... 6.0 6.3 6.2 6.2 6.2 .2

Mountain division ............................................ 5.3 5.6 5.4 5.3 5.3 .0

Pacific division ............................................... 6.3 6.5 6.6 6.5 6.6 .3

1 Data for 2002 have not been benchmarked.

 2001

 IV

20021

Over-theyear change2

IV

Region and division

2

 Weighted changes for divisions within regions may not average to

Table 9.

sion had the lowest rate, 4.2 percent, followed by New England, 4.8 percent. With the exception of 9 quarters in the

early 1980s, one or both of these have posted the lowest divisional unemployment rate.61

 All other divisions recorded rates

between 5.0 and 5.9 percent at the close of 2002.

All geographic divisions continued to register sizeable

over-the-year job losses in manufacturing employment in

2002. However, the smallest relative contractions occurred in

the East North Central and East South Central divisions,

where the manufacturing industry accounts for the greatest

shares of total employment, while the largest decline occurred

in the Mountain division, where the manufacturing industry

accounts for the least share of total employment. For all

divisions but the East South Central, the decline in durable

goods manufacturing was steeper than the decline in nondurable goods manufacturing. Every division reported job

losses in transportation and public utilities, and three of the

nine divisions experienced sharper declines in this sector

than in manufacturing. For most divisions, employment was

down more severely in communications and public utilities

than in transportation. Wholesale trade continued to contract in every division, but most slightly in the Pacific.

The healthy construction employment advances in the East

South Central and Middle Atlantic contrasted with the steep

declines for that sector in the Mountain, Pacific, South Atlantic, and West North Central divisions, while the growth in

retail trade in the Pacific contrasted with the large losses in

the East North Central and South Atlantic divisions. Services, which accounts for by far the largest share of jobs,

grew at least somewhat in all divisions, including brisk advances in the East South Central, Mountain, and South Atlantic. Government—particularly at the local level—also added

jobs across all geographic divisions, most rapidly in those of

the South and West.

States. On net, joblessness was up over the year in 28 States,

down in 19 States and the District of Columbia, and unchanged

in 3 States. (See chart 6.) Only 14 States experienced unemployment rate increases of 0.5 percentage point or more, compared with 38 States over the year ending in the fourth quarter

of 2001. The steepest rate climb, 1.4 percentage points, came

in West Virginia, which had posted the largest decline in unemployment among States in 2001, settling at its historical low

rate of 4.6 percent in the fourth quarter of that year. No other

State recorded an unemployment rate increase as large as a

full percentage point in 2002.

Nevada experienced the largest jobless rate decline among

States in 2002, –2.0 percentage points. This constituted the

most marked unemployment trend reversal for a State, as it

followed an increase of 2.4 percentage points in 2001. Nevada

also registered the most rapid payroll employment growth

over the year. Some of the turnaround there could be attributed to the partial return to normalcy in tourism following the

terrorist attacks of September 11, 2001, but much of the job

growth was population-driven. Three other States—Hawaii,

Kentucky, and South Dakota—reported jobless rate declines

of a full percentage point or more. Hawaii and Kentucky were

also among the 5 States with the most rapid payroll employment growth in 2002.

Four of the six States with the highest relative joblessness

at the end of 2002 were located in the Pacific division. Oregon

continued to post the highest unemployment rate, 7.1 percent, followed closely by Alaska at 7.0 percent. Conditions in

Oregon were actually much improved over the year. The

regional changes due to independent rounding.

SOURCE: Bureau of Labor Statistics, Local Area Unemployment Statistics.
Monthly Labor Review February 2003 21

State’s unemployment-rate decline of 0.5 percentage point in

2002 followed a 2.8-point rise in 2001. Oregon also posted a

small increase in payroll employment in 2002—a marked improvement from the more than 2-percent contraction during

the previous year. In Alaska, the 0.9-percentage point increase in joblessness was among the largest for any State,

and came in spite of continued healthy payroll employment

growth.

Three additional States—Illinois, Mississippi, and Washington—also had unemployment rates above 6.5 percent at

the end of 2002. While Mississippi experienced small employment growth, Illinois and Washington each continued to shed

relatively large numbers of payroll jobs. In Illinois, the losses

were broad-based, as job declines came in every major industry group except construction. In Washington, by contrast,

almost all of the net employment loss came in manufacturing,

with about 50 percent of the decline attributable to aircraft

and parts manufacturing.

The two most populous States—California and Texas—

and the District of Columbia, Louisiana, and North Carolina

also had unemployment rates of more than 6 percent in the

fourth quarter of 2002. In California, heavy over-the-year job

losses in business services and IT-related manufacturing were

balanced by strong growth in local government and retail

trade. In Texas, the net effect of employment declines across

most major industry groups was lessened by the rapid expansion of local government.

Five of the 10 States with unemployment rates of 4.0 percent or less in the fourth quarter of 2002 were located in the

West North Central division. South Dakota recorded the lowest rate, 2.8 percent, followed by Nebraska and North Dakota,

3.3 percent each. None of these States experienced appreciable changes in payroll employment over the year. Meanwhile, one of the remaining lowest unemployment-rate States

in the fourth quarter—Delaware, at 4.0 percent—shed jobs at

the most rapid pace in 2002. Montana posted its historical

low unemployment rate in the third quarter, 4.2 percent, having experienced relatively robust employment growth in 2002.

Metropolitan areas.

62 More than two-thirds of the large metropolitan areas saw their unemployment rates move upward

in 2002.63 However, for most of these 35 areas with unemployment rate increases, the rise in joblessness was less than it

had been in 2001. (See table 10.) San Jose, CA, once again

Chart 6. Over-the-year change in unemployment rates by State, seasonally adjusted,

 fourth quarter 2001–02
22 Monthly Labor Review February 2003

U.S. Labor Market, 2002

Changes in fourth quarter unemployment rates for select large metropolitan areas,

not seasonally adjusted, 2001–02

Atlanta, GA ............................................................................. 4.1 1.4 4.7 .6

Baltimore, MD ........................................................................ 4.7 .3 4.3 –.4

Bergen-Passaic, NJ ........................................................... 4.7 1.3 5.2 .5

Boston, MA-NH ...................................................................... 3.7 1.8 4.5 .8

Buffalo-Niagara Falls, NY ................................................ 5.4 .7 5.4 .0

Charlotte-Gastonia-Rock Hill, NC-SC ......................... 5.7 1.9 5.7 .0

Chicago, IL ............................................................................. 5.7 1.6 6.4 .7

Cincinnati, OH-KY-IN ............................................................. 4.1 .7 4.2 .1

Cleveland-Lorain-Elyria, OH ........................................... 5.2 1.2 5.8 .6

Columbus, OH ....................................................................... 3.1 .9 4.2 1.1

Dallas, TX ............................................................................... 5.9 3.1 6.4 .5

Denver, CO ............................................................................. 4.7 2.5 5.3 .6

Detroit, MI ............................................................................... 5.4 2.3 5.3 –.1

Fort Lauderdale, FL ............................................................ 6.0 2.4 5.8 –.2

Fort Worth-Arlington, TX .................................................. 4.8 1.9 5.7 .9

Greensboro—Winston-Salem—High Point, NC ..... 5.6 2.4 5.7 .1

Hartford, CT ........................................................................... 3.4 1.6 4.3 .9

Houston, TX ........................................................................... 4.5 1.0 5.6 1.1

Indianapolis, IN .................................................................... 4.0 1.9 4.5 .5

Kansas City, MO-KS ........................................................... 4.5 .9 5.0 .5

Los Angeles-Long Beach, CA ....................................... 6.1 1.2 6.0 –.1

Memphis, TN-AR-MS ............................................................. 4.7 .8 4.6 –.1

Miami, FL ................................................................................. 8.1 2.7 7.1 –1.0

Middlesex-Somerset-Hunterdon, NJ .......................... 3.7 1.2 4.4 .7

Milwaukee-Waukesha, WI ............................................... 4.7 1.3 5.1 .4

Minneapolis-St. Paul, MN-WI .......................................... 3.5 1.0 3.5 .0

Nassau-Suffolk, NY ........................................................... 3.7 1.0 3.8 .1

New Orleans, LA ................................................................. 5.6 .5 5.3 –.3

New York, NY ......................................................................... 6.5 1.6 7.3 .8

Newark, NJ ............................................................................. 4.8 1.4 5.6 .8

Norfolk-Virginia Beach-Newport News, VA-NC ........ 4.1 1.6 3.9 –.2

Oakland, CA .......................................................................... 4.9 2.5 5.9 1.0

Orange County, CA ............................................................ 3.5 1.3 3.9 .4

Orlando, FL ............................................................................ 5.5 3.0 4.8 –.7

Philadelphia, PA-NJ ............................................................. 4.4 .7 5.2 .8

Phoenix-Mesa, AZ .............................................................. 5.1 2.5 5.2 .1

Pittsburgh, PA ....................................................................... 4.2 .4 5.0 .8

Portland-Vancouver, OR-WA ........................................... 7.2 3.5 7.0 –.2

Providence-Fall River-Warwick, RI-MA ...................... 4.5 .9 5.0 .5

Riverside-San Bernardino, CA ...................................... 5.1 .4 5.8 .7

Rochester, NY ...................................................................... 5.1 1.5 5.4 .3

Sacramento, CA ................................................................... 4.3 .7 5.3 1.0

St. Louis, MO-IL .................................................................... 4.9 .9 5.0 .1

Salt Lake City-Ogden, UT ............................................... 4.6 1.6 4.9 .3

San Antonio, TX .................................................................. 4.4 1.3 4.9 .5

San Diego, CA ...................................................................... 3.6 1.0 4.2 .6

San Francisco, CA ............................................................. 4.8 2.9 5.3 .5

San Jose, CA ........................................................................ 6.7 5.2 7.9 1.2

Seattle-Bellevue-Everett, WA ....................................... 6.2 2.4 6.2 .0

Tampa-St. Petersburg-Clearwater, FL ........................ 4.4 1.8 4.4 .0

Washington, DC-MD-VA-WV ................................................ 3.7 1.4 3.2 –.5

Fourth quarter, 2001 Fourth quarter, 2002

Metropolitan area

Unemployment

rate

Over-theyear changeOver-theyear change

Unemployment

rate

Table 10.

NOTE: Data for 2002 have not been benchmarked.

SOURCE: Bureau of Labor Statistics, Local Area Unemployment Statistics.
Monthly Labor Review February 2003 23

recorded the largest unemployment rate increase, 1.2 percentage points. Columbus, OH—which had registered the lowest

unemployment rate at the end of 2001—and Houston, TX,

closely followed with increases of 1.1 percentage points each.

Increases of a full percentage point were also registered for

two other areas in California—Oakland and Sacramento.

Eight of the 11 large metropolitan areas with decreasing

unemployment rates in 2002 were located in the South. Miami, FL, which had recorded the highest unemployment rate

among these areas at the end of 2001, experienced the most

sizeable rate decline in 2002, –1.0 percentage point. Another

Florida area—Orlando—followed with a rate decline of 0.7

percentage point. The Miami area added payroll jobs at a

much accelerated pace in 2002, as compared with 2001, while

the Orlando area added a small number of jobs in 2002 following a substantial employment contraction in the previous year.

Washington, DC-MD-VA-WV, was the only other large metropolitan area to post an over-the-year unemployment rate drop

as large as 0.5 percentage point.

In the fourth quarter of 2002, San Jose, CA, recorded the

highest unemployment rate, 7.9 percent, among the large metropolitan areas. This area continued to experience the sharpest payroll employment decline in 2002. New York, NY, and

Miami, FL, had the next highest jobless rates (7.3 and 7.1 percent, respectively), followed by Portland-Vancouver, OR-WA,

7.0 percent. For the New York area, the annual rate of employment contraction decreased notably from 2001 to 2002. The

continued job growth in the Miami area has already been

noted. Meanwhile, broad-based job losses persisted in the

Portland-Vancouver area in 2002, although they were far less

severe than in 2001.

Washington, DC-MD-VA-WV, recorded the lowest unemployment rate among the large metropolitan areas, 3.2 percent

in the fourth quarter of 2002, despite a considerable loss of

jobs over the year. Four additional areas—Minneapolis-St.

Paul, MN-WI, Nassau-Suffolk, NY, Norfolk-Virginia BeachNewport News, VA-NC, and Orange County, CA—also registered rates below 4.0 percent. None of these four areas experienced a substantial change in their unemployment rate from

the fourth quarter of 2001, while only Norfolk-Virginia BeachNewport News reported an over-the-year payroll employment

change in excess of one-half percent.

Labor market conditions remained weak in 2002, following a more marked deterioration after the start of the recession in 2001. The unemployment rate edged up during the

year, averaging 5.9 percent in the fourth quarter. Job losses

were spread throughout most of the occupational groups,

particularly in the precision production, craft, and repair fields

as well as among operators, fabricators, and laborers. Service occupations were the only major occupational group to

show a definitive increase in employment over the year. The

earnings of most groups increased only slightly in 2002, after

accounting for inflation. Earnings growth had begun slowing from the pace reached in the late 1990s with the onset of

the recession in 2001. Nonfarm employment declined for the

second consecutive year, although the job loss in 2002 was

much smaller than in 2001. Job losses in 2002 were concentrated in manufacturing, retail trade, and communications.

Health services and government were the main sources of

job growth in 2002.

Local labor markets also continued to deteriorate in 2002,

with rising jobless rates and declining payrolls widespread

throughout the country. The pace of deterioration abated

from 2001 for most local markets, and even gave way to conditions consistent with economic growth for some.

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).

2

 Clare Ansberry, “On a Budget/A Cloud over the Recovery: Businesses’ New Frugal Ways/After 1990s Investment Spree, Corporations

are Trying To Do More With Less,” The Wall Street Journal, Oct. 16,

2002; and Steve Pearlstein, “Too Much Supply, Too Little Demand,”

The Washington Post, Aug. 25, 2002, p. A1.

3

 See Katherine Abraham, “The Role of Flexible Staffing Arrangements in Short Term Workforce Adjustment Strategies,” in Robert

Hart, ed., Employment, Unemployment and Hours of Work (London,

George Allen and Unwin, 1998); Report on the American Workforce

(U.S. Department of Labor, 1999), pp. 18–24; and Rachel Krantz,

“Employment in business services: a year of unprecedented decline,”

Monthly Labor Review, April 2002, pp. 17–24.

4

 Real private fixed investment data are published by the Bureau of

Economic Analysis on the Internet at http://www.bea.gov/bea/dn/

nipaweb/TableViewFixed.asp#Mid (visited Feb. 2003).

Notes

5

 Industrial production data are published by the Federal Reserve on

the Internet at http://www.federalreserve.gov/releases/g17 (visited Feb. 2003).

6

 Total manufacturers’ inventories were down 2.6 percent for the

year (through Nov. 2002). Inventories data are published by the U.S.

Census Bureau on the Internet at http://www.census.gov/mtis/www/

mtis.html (visited Feb. 2003). New orders data are published by the

U.S. Census Bureau online at http://www.census.gov/indicator/www/

m3/ (visited Dec. 2002).

7

 Trade data are published by NAICS codes, which do not directly

correspond with SIC classifications. Figures are comparisons of the

period January through November for the years 2001 and 2002; at

publishing time, these were the latest available data. Trade data are

available from the U.S. International Trade Commission’s interactive

tariff and trade dataweb, http://dataweb.usitc.gov (visited Feb. 2003).

8

 This comparison uses the broad dollar index, which measures

exchange values of the U.S. dollar against the currencies of a large

group of major U.S. trading partners. Data on exchange rates are
24 Monthly Labor Review February 2003

U.S. Labor Market, 2002

published by the Federal Reserve on the Internet at http://

www.federalreserve.gov (visited Feb. 2003).

9

 United Steelworkers Association at http://www.uswa.org/sra/

facts.html (visited Dec. 2002).

10 Industrial production data are published by NAICS codes, which do

not directly correspond with SIC classifications. Industrial production

data are published by the Federal Reserve on the Internet at http://

www.federalreserve.gov/releases/g17 (visited Feb. 2003).

11 Real private fixed investment data are published by the Bureau of

Economic Analysis on the Internet at http://www.bea.gov/bea/dn/

nipaweb/TableViewFixed.asp#Mid (visited Feb. 2003).

12 Data are from the input-output tables produced by Bureau of Labor

Statistics Employment Projections program. They are available on the

Internet at http://www.bls.gov/emp/home.htm (visited Nov. 2002).

13 Construction-related manufacturing includes various industries by

four-digit SIC within lumber products; stone, clay, and glass products;

fabricated metals; rubber and other plastic products; and chemicals.

14 Data on truck tonnage are available, by subscription, from the

American Trucking Associations.

15 See “No end in sight—The telecoms slump,” The Economist,

May 4, 2002; Pascal Aguirre and Glen Macdonald, “Manager’s Journal:

Accounting for Telecom’s Failures,” The Wall Street Journal, Sept. 3,

2002; and “Too many debts—too few calls—The telecoms crisis—The

telecoms industry is in a mess. What went wrong, and how can it be

fixed?,” The Economist, July 20, 2002.

16 Real private fixed investment data are published by the Bureau of

Economic Analysis on the Internet at http://www.bea.gov/bea/dn/

nipaweb/TableViewFixed.asp#Mid (visited Feb. 2003).

17 See Daniel Michaels and J. Lynn Lunsford, “Leading the News:

Airbus is Awarded easyJet Order for 120 New Planes Over Boeing,” The

Wall Street Journal, Oct. 15, 2002.

18 On Sept. 11, 2001, terrorists attacked three locations in the

United States. Terrorists hijacked commercial jetliners and crashed

them into each of the twin towers of the World Trade Center in New

York City, and into the Pentagon, in Arlington, Virginia. A fourth

jetliner that had been hijacked crashed in a field in Pennsylvania.

19 See Melanie Trottman and Scott McCartney, “Executive flight:

The age of ‘Wal-Mart’ airlines crunches the biggest carriers—Low-cost

rivals win converts as business travelers seek alternatives to lofty fares—

The high cost of convenience,” The Wall Street Journal, June 18, 2002;

Elisabeth Goodridge, “Virtual meetings yield real results,”

InformationWeek, Oct. 22, 2001; Anthony L. Velocci, Jr., “Can Majors

Shift Focus Fast Enough to Survive?,” Aviation Week and Space Technology, Nov. 18, 2002; and Tom Belden, “Businesses can save on travel

and still keep employees flying,” The Milwaukee Journal Sentinel, June

4, 2001.

20 Melanie Trottman and Scott McCartney, “Executive flight: The

age of ‘Wal-Mart’ airlines crunches the biggest carriers...

21 Kristin S. Krause, “Airlines Burn Million$,” Traffic World, Nov. 4,

2002; Stephen Power and Rick Brooks, “Health Systems on Alert: Post

Office Shifts Mail off Passenger Jets,” The Wall Street Journal, Oct. 16,

2001.

22 The 2002 figure is forecasted. See “State of the U.S. Airline

Industry: A Report on Recent Trends for U.S. Air Carriers 2002–2003,”

published by the Air Transport Association, Nov. 25, 2002, and available on the Internet at http://www.airlines.org/ (visited Jan. 2003).

23 Darren Shannon, “GDS woes highlighted as agents explain zero

commissions effects,” Travel Agent, May 6, 2002.

24 For more information on the Transportation Security Administration, see http://www.tsa.gov.

25 For more information on how the Federal Reserve Bank is able

to influence economy-wide interest rates by changing its target Federal funds rate, see http://www.ny.frb.org/pihome/educator/fed/

tools.html.

26 Federal funds rates and mortgage rates are both available from the

Federal Reserve on the Internet at http://www.federalreserve.gov

(visited Feb. 2003).

27 Housing affordability data are published by the National Association of Realtors on the Internet at http://www.realtor.org (visited

Feb. 2003).

28 Housing starts are published by the U.S. Census Bureau on the

Internet at http://www.census.gov/const/www/newresconstindex.html

(visited Feb. 2003).

29 The SIC system does not divide special trade contractors into

residential and nonresidential construction components.

30 Existing home sales data are published by the National Association of Realtors on the Internet at http://www.realtor.org (visited

Feb. 2003); new home sales data are published by the U.S. Census

Bureau on the Internet at http://www.census.gov/const/www/

newressalesindex.html (visited Feb. 2003).

31 Data on home sales prices are published by the National Association of Realtors on the Internet at http://www.realtor.org (visited Feb.

2003); see Patrick Barta, “The Economy: Housing Boom Softens Stock

Blow—Amid Shrinking Portfolios, Home Values Have Risen About 5%

Through August,” The Wall Street Journal, Sept. 9, 2002; Ray A. Smith,

“Is Now the Time to Invest in Real Estate?—As Stock Market Stumbles,

Funds Pour Into Properties, Finding the Right Investment,” The Wall

Street Journal, July 3, 2002; and Ray A. Smith, “Real Estate Offers

Steadier Returns Than Stock,” The Wall Street Journal, Jan. 28, 2002.

32 The Mortgage Refinance Index is published by the Mortgage

Bankers Association of America, on the Internet at http://

www.mbaa.org/ (visited Jan. 2003).

33 Consumer spending data are published by the Bureau of Economic

Analysis on the Internet at http://www.bea.gov/bea/dn/nipaweb/

TableViewFixed.asp (visited Feb. 2003).

34 Ibid.

35 Vehicle sales data are published by the Bureau of Economic Analysis

on the Internet at http://www.bea.gov/bea/dn1.htm (visited Feb. 2003).

36 Michael Munley and William A. Strauss, “Auto experts look forward amid concerns about costs,” Chicago Fed Letter, July 2002.

37 See Karen Lundegaard, “While U.S. Auto Makers Sputter, Their

dealers go full throttle,” Asian Wall Street Journal, Sept. 10, 2002; and

Norihiko Shirouzu, “As Foreign Car Makers Expand in U.S., Glut threatens the Big 3,” Asian Wall Street Journal, July 11, 2002.

38 Industrial production data are published by the Federal Reserve on

the Internet at http://www.federalreserve.gov (visited Feb. 2003).

Domestic auto production data are published by the Bureau of Economic Analysis on the Internet at http://www.bea.gov/bea/dn1.htm

(visited Feb. 2003).

39 Michael Munley and William A. Strauss, “Auto experts look

forward amid concerns...

40 Auto-related manufacturing industries include automotive and

apparel trimmings (SIC 2396); flat glass (SIC 3211); automobile

stampings (SIC 3465); carburetors, pistons, rings, valves (SIC 3592);

vehicular lighting equipment (SIC 3647); and engine electrical equipment (SIC 3694).

41 Data compare the periods January to November in the years 2001

and 2002; at publishing time, these were the latest available data. Retail

sales data are published by the U.S. Census on the Internet at http://

www.census.gov/econ/www/retmenu.html (visited Feb. 2003).

42 See James K. Glassman, “Retail’s Surprising Shelf Life,” The Washington Post, Oct. 27, 2002; and Amy Tsao, “Will Wal-Mart Take Over

the World? First it gobbled the mom-and-pops, then mauled discount

department stores. What’s the insatiable chain’s next target?”

BusinessWeek Online, Dec. 2, 2002.

43 See “1992 to 2002: The Supercenter era,” DSN Retailing Today,

Aug. 2002; Mike Duff, “Supercenters take lead in food retailing,” DSN

Retailing Today, May 6, 2002.
Monthly Labor Review February 2003 25

44 In recent years, the healthcare industry has been experiencing

shortages of nurses, pharmacists, IT workers, emergency room workers,

imaging technicians, nursing assistants, homecare aides, and other types

of workers. While it is difficult to rapidly acquire the skills needed for

many healthcare occupations, not all of these occupations require extensive education and training. With a loosening of labor market

conditions, it is likely the lower-skilled positions became more attractive to displaced workers. Additionally, evidence suggests that a loosening of labor market conditions lured IT workers to healthcare. For

more information, see Phillip Dunn, “No job vacancy,” Hospitals and

Health Networks, Mar. 2002; Jeff Tieman, “A grim outlook,” Modern

Healthcare, Feb. 4, 2002; and “Initiative addresses shortage of longterm care paraprofessionals,” Health Care Financing Review, spring

2002.

45 The “baby boom echo” refers to Americans born during a period

of increased birth rates which began in the mid-1970s and peaked in

1990. See “The Condition of Education 2002” (U.S. Department of

Education, National Center for Education Statistics, 2002–025), Washington, DC. Note that enrollment data for 2002 are projections.

46 Anne Marie Chaker, “State Schools Plan Big Tuition Jumps,” The

Wall Street Journal, June 20, 2002.

47 The unemployment rate reached a high of 10.7 percent in the

fourth quarter of 1982 and 6.6 percent in the first quarter of 1991

(though the rate rose even after the recession officially ended, to 7.6

percent in the second quarter of 1992).

48 Employment estimates referenced in this section are from the

CPS. CPS data may differ significantly from CES data, mainly due to

conceptual differences between the surveys. See the box note on page

4 for more details on the conceptual differences between employment

estimates from the two surveys.

49 The unemployment rate of 17.1 was the highest rate since the

first quarter of 1996.

50 The results of the 2000 Census revealed that the population

estimates, based on the 1990 Census, were too low. The revised population controls, based on the 2000 Census and published in January

2003, show that Hispanics have surpassed Blacks not only in employment levels but also in population size.

51 See Reuters, “High-Tech Silicon Valley’s Jobless Rate 7.9 Percent,” Forbes.com, Nov. 9, 2002, available on the Internet at http:/

/www.forbes.com/newswire/2002/11/09/rtr789864.html (visited

Dec. 2002). Also, see Anthony DePalma, “White-Collar Layoffs,

Downsized Dreams,” The New York Times, Dec. 5, 2002, available on

the Internet at http://www.nytimes.com/2002/12/05/nyregion/

05DREA.html (visited Dec. 2002).

52 See Michael J. Mandel, et al., “The Educated Unemployed,”

Business Week Online, Sept. 30, 2002, available on the Internet at

http://www.businessweek.com/magazine/content/02_39/

b3801049.htm (visited Dec. 2002). Also, see Rachel Konrad, “From

High-Tech to Blue Collar,” News.com, Feb. 8, 2002, available on the

Internet at http://news.com.com/2100-1017-832553.html (visited

Dec. 2002).

53 Chart 5 provides an interesting perspective on this situation. In

the past three recessions, the unemployment rate for workers with at

least a bachelor of arts degree consistently rises from around the 1.9

percent range to between 3 and 3.5 percent. The unemployment rate

for workers with some college or an associate degree is not as consistent, but the rate increases from less than 4 percent to near the 5-

percent range or more in each of the three most recent recessions.

54 For example, chart 5 shows that the unemployment rate for

workers with less than a high school diploma rose from the 8-percent

range to the 16-percent range in the 1980s and from around 9 percent

to more than 12 percent in the 1990s. This contrasts with the current

rise from slightly more than 6 percent to around 9 percent. Workers

with a high school diploma, no college also experienced a relatively

mild unemployment rate increase during the recent downturn.

55 For a more detailed discussion of this trend, see David S. Langdon,

Terence M. McMenamin, and Thomas J. Krolik, “U.S. labor market in

2001: economy enters a recession,” Monthly Labor Review, Feb. 2002,

pp. 26–27. Between the beginning of the recent recession as determined by the National Bureau of Economic Research (the first quarter

of 2001) and the fourth quarter of 2002, more than 9 out of 10 persons

who became unemployed job losers (on net) believed their job loss was

permanent.

56 See Davide Dukcevich, “Strayer Gains As Unemployment Rises,”

Forbes.com, May 3, 2002, available on the Internet at http://

forbesbest.com/2002/05/03/0503strayer.html (visited Dec. 2002).

57 Data in this section of the article are annual averages.

58 The earnings data discussed in this section have been adjusted for

inflation.

59 Ten percent of all full-time wage and salary workers earn less than

the upper limit of the first decile, and 90 percent earn less than the

upper limit of the ninth decile.

60 The four census regions and nine divisions are composed of the

following States and the District of Columbia: Northeast: New England division—Connecticut, Maine, Massachusetts, New Hampshire,

Rhode Island, Vermont; Middle Atlantic division—New Jersey, New

York, Pennsylvania; Midwest: East North Central division—Illinois,

Indiana, Michigan, Ohio, Wisconsin; West North Central division—Iowa,

Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota;

South: South Atlantic division—Delaware, District of Columbia, Florida,

Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia; East South Central division—Alabama, Kentucky, Mississippi,

Tennessee; West South Central division—Arkansas, Louisiana, Oklahoma, Texas; West: Mountain division—Arizona, Colorado, Idaho,

Montana, Nevada, New Mexico, Utah, Wyoming; Pacific division—

Alaska, California, Hawaii, Oregon, Washington.

61 Quarterly series for the West region, the Pacific division, and

California begin in 1980. Series for other regions, divisions, and States

begin in 1978.

62 The analysis of metropolitan area data is limited to the 51 areas

with a 1990 census population of 1 million or more.

63 Neither unemployment nor payroll employment data are available on a seasonally adjusted basis at the metropolitan area level. The

estimates presented here are not seasonally adjusted quarterly data,

which preclude analysis of over-the-quarter changes.