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117 Monthly Lab. Rev. 3 (1994)
The Labor Market Improves in 1993

handle is hein.journals/month117 and id is 133 raw text is: The labor market improves in 1993 Employment rose substantially and unemployment declined in 1993; nevertheless, parts of the work force still suffered from the adverse effects of the recent economic contraction Jennifer Gardner, Steven Hipple, and Thomas Nardone Jennifer Gardner, Steven Hipple, and Thomas Nardone are economists in the Division of Labor Force Statistics, Bureau of Labor Statistics. he labor market recovery picked up some momentum in 1993. There was a large gain in employment, and some industries re- corded their first sustained increase in jobs in sev- eral years. In addition, unemployment remained on the downward trend that began in mid-1992. However, structural changes in the economy and the lingering effects of the 1990-91 recession con- tinued to adversely affect segments of the Ameri- can work force. Several industries lost more jobs, and in certain respects, underemployment of the economy's labor resources persisted. Nonfarm payroll employment, as measured by the BLS survey of employers, rose by 1.9 million in 1993.1 Most of the jobs added over the year were in the services and retail trade industries. Employ- ment in construction experienced its first over-the- year increase since 1989, although it remained substantially below its prerecession peak. And the string of manufacturing job losses that began in 1989 continued throughout most of the year; be- tween early 1989 and the fall of 1993, factory employment dropped by 1.8 million. Total employment, as measured by the house- hold survey, grew by about 2.4 million over the year, and the proportion of the population with jobs-the employment-to-population ratio-rose from 61.3 to 61.9 percent. However, this ratio was still well below the levels reached before the 1990-91 recession. The number of unemployed persons, at 8.4 million in the fourth quarter, had declined by nearly 900,000 in 1993, bringing the unemployment rate down to 6.5 percent. (See the box on the following page for information on revi- sions to the Current Population Survey.) Overview of the economy Although the recession ended in early 1991, eco- nomic growth was relatively slow in that year and most of 1992, compared with other recovery peri- ods. This was mainly due to a number of long-term problems, some of which continued to limit growth in 1993. (See table 1.) Defense cutbacks continued to act as a drag on the economy, and construction of office buildings remained sluggish as the result of overbuilding during the 1980's. Exports were relatively weak, as the Nation's ma- jor trading partners have been slow to emerge from their economic downturns. Also, consumer demand, which accounts for three-fifths of eco- nomic activity, has been negatively affected by slow job growth in recent years. The increase in employment since the recession's trough has been unusually sluggish, compared with other economic recoveries. Em- ployers have been extremely reluctant to hire, in part because of uncertainty over the strength and permanence of the expansion, and because in- creasingly competitive markets have caused them to pursue more flexible labor strategies. With many workers uncertain about their future job situ- Monthly Labor Review February 1994 3

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