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February 1995, Vol. 118, No. 2
Lois M. Plunkert and Howard V. Hayghe
T he 1994 job market was characterized by strong employment growth and continued declines in unemployment. Some 3.4 million jobs were added to nonfarm payrolls and the unemployment rate dropped to 5.6 percent by yearend.
In the goods-producing sector, manufacturing, which had lost jobs steadily from early 1989 to mid-1993, rebounded in 1994, despite a drag on employment growth caused by continued defense cutbacks. In addition, manufacturing employers pushed the average factory workweek to extraordinarily high levels by expanding their use of overtime. Construction firms also added large numbers of workers, encouraged by low mortgage interest rates that continued through the first half of the year.
The services industry itself accounted for nearly half of the overall gains, but, within the broad service-producing sector, substantial employment advances also occurred in retail trade and in State and local governments.
Unemployment continued to trend downward; by the fourth quarter, the jobless rate had fallen to 5.6 percent from 6.6 percent in the first quarter of the year. Well over a million fewer persons were jobless at yearend than in the first quarter.
This article takes a detailed look at labor market developments during 1994 based on data from both the Current Employment Statistics (CES) survey and the Current Population survey (CPS). Its emphasis is on the interrelationship of those developments with trends in the economy.1
This excerpt is from an article published in the February 1995 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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1 The Current Employment Statistics (CES) survey conducted by the Bureau of Labor Statistics collects information on payroll employment , hours, and earnings from more than 390,000 nonfarm business establishments employing about 49 million workers.The Current Population Survey (CPS), a nationwide sample survey of some 60,000 households conducted for the Bureau of Labor Statistics, by the Bureau of Census, collects information about the demographic characteristics and employment status of the noninstitutional population aged 16 and older.
Employment and unemployment data in this article are quarterly averages, unless otherwise noted. Fourth-quarter data from the CES are preliminary. Estimates of over-the-year change in nonfarm payroll employment, hours, and earnings from the CES are based on a comparison of fourth-quarter 1993 and 1994 averages. Because of the major redesign of the CPS that became effective in January 1994, however, household survey data in this article cover only the first through the fourth quarters of 1994.
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