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Eastern Standard Time.

                              

                        Statement of

                     Kathleen P. Utgoff
                        Commissioner
                 Bureau of Labor Statistics
                              
                  Friday, January 10, 2003




     Nonfarm payroll employment declined by 101,000 in
December, following a loss of 88,000 jobs in November (as
revised).  The unemployment rate held at 6.0 percent, after
increasing in November.  Despite modest growth in the spring
and summer of 2002, payroll employment showed a net loss of
181,000 over the year.
     
     The recent weakness partly reflects steeper job losses
in manufacturing.  In December, employment in the nation’s
factories declined by 65,000.  Job losses in the industry
deepened in recent months following more moderate declines
in the spring and early summer.  The bulk of the employment
reductions in manufacturing have been in durable goods
production, notably in the electrical equipment, fabricated
metals, industrial machinery, and transportation equipment
industries.  Nondurable goods industries, however, have not
been immune to job loss.  In December, there were sizable
job losses in rubber and plastics and in printing and
publishing.  Over the year, overall manufacturing employment
was down by nearly 600,000.
     
     The manufacturing workweek increased by 0.3 hour to
40.9 hours in December, and factory overtime rose by 0.2
hour to 4.2 hours; both figures are about in line with the
levels that prevailed for most of 2002.
     
     There was a particularly large drop in retail trade
employment in December (-104,000); many retailers hired
fewer workers than usual for the month.  The largest decline
occurred in eating and drinking places, but there also were
sizable job losses in food stores, auto dealerships, general
merchandise stores, and miscellaneous retailers (such as toy
stores).  Over the year, employment in retail trade fell by
173,000.  At the wholesale trade level, employment continued
to drift down in December and declined by 65,000 over the
year; these job losses occurred among distributors of
durable goods.
     
     Other industries ending the year with substantial job
losses included the transportation industry, where
employment fell by 23,000 in December, mostly in air
transportation.  Employment in communications also continued
to trend downward over the month.  In recent months, the
rate of job loss in this industry has slowed, but, for the
year as a whole, the communications industry lost 100,000
jobs.
     
     In December, job losses were partially offset by job
growth in a few areas of the economy.  The services industry
added 73,000 jobs over the month and nearly 600,000 jobs
over the year.  In December, there was a large gain in
amusement and recreation services (+28,000) and in hotels and
other lodging places (+16,000).  Health services continued
to add jobs (+10,000), albeit at about half its average
monthly pace for the past year.  Within business services,
there was a job gain of 19,000 in help supply services, on
the heels of three consecutive monthly declines.
     
     In the finance industry, mortgage bankers continued to
bring on workers to cope with continued high levels of
refinancing activity and the ongoing strength in the housing
market.  Real estate employment continued to trend upward,
also boosted by the high volume of home sales.  Together,
these two industries added 82,000 jobs in 2002. Construction
employment was little changed in December and has held at
about 6.5 million since April 2002.  The industry continues
to be supported by robust homebuilding activity.
     
     Government employment changed little over the month but
expanded by 257,000 over the year, compared with an increase
of 463,000 in 2001.  Over the past year, more than two-
thirds of the growth was in local government with much of
the remainder attributable to hiring for the Federal
Government’s Transportation Security Administration.
     
     Average hourly earnings of production or nonsupervisory
workers in the private sector rose by 5 cents to $14.98 in
December.  Over the year, hourly earnings increased by 3.0
percent.
     
     Moving on to the data from our survey of households,
the unemployment rate held at 6.0 percent in December and
the number of unemployed persons was essentially unchanged
at 8.6 million.  The jobless rate for adult women edged up
over the month, but the rates for other major demographic
groups were little changed.  The number of persons jobless
for 27 weeks or longer continued to trend upward; at 1.9
million in December, the ranks of the very long-term
unemployed were up by 741,000 over the year.  Total
employment, as measured by the household survey, edged down
in December, and the employment-to-population ratio declined
to 62.3 percent.
     
     In summary, data from our monthly establishment and
household surveys suggest that the labor market weakened
somewhat as the year 2002 came to a close.  Nonfarm payroll
employment declined in December for the second month in a
row, and the jobless rate held at 6.0 percent, after
increasing in November.  In December, sizable job losses
occurred in manufacturing and retail trade, more than
offsetting job growth that was confined largely to services
and industries that benefit from low mortgage interest rates
and a robust housing market.