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March 2004, Vol. 127, No. 3
The U.S. labor market in 2003: signs of improvement by years end
Rachel Krantz, Marisa Di Natale, and Thomas J. Krolik
In 2003, total nonfarm employment continued to decline until late in the year. The unemployment rate rose during the first half of the year and then fell, ending the year about where it started.
Several factors affected employment trends last year. Lingering effects from both the late-1990s technology bubble and the 2001 recession, as well as related State and local government budget crises, led to continued job losses or to rates of employment growth slower than those seen in recent years. Strongly competitive markets drove ongoing structural change in several industries, while lackluster tourism translated into little or no growth in some tourism-related industries. In contrast to an otherwise weak labor market, historically low interest rates were a catalyst to job growth in interest-rate-sensitive industries. The data in this article are primarily from the Current Employment Statistics (CES) survey, the Current Population Survey (CPS), and the local Area Unemployment Statistics (LAUS) program. (See page 4 for an explanation of differences between the CES survey and the CPS.)
Total nonfarm employment declined through the first three quarters of the year and then registered small gains. Over the year, net payroll employment was down by 243,000. Manufacturing lost 642,000 jobs, the largest drop of any sector. Information, transportation and warehousing, and wholesale trade also posted employment declines. Job losses were not unique to private industry: government employment contracted for the first time since 1982. Private education and health services added 329,000 workers in 2003, more than any other sector, although the rate of growth slowed relative to the rate in recent years. Employment in professional and business services, financial activities, and construction grew faster in 2003 than 2002. Largely on the basis of strength in food services, the leisure and hospitality sector also added workers, while retail trade and the natural resources and mining sector showed little change in employment.
This excerpt is from an article published in the March 2004 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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