The job market remains strong in 1999 - Statistical Data Included

Monthly Labor Review, Feb, 2000 by Jennifer L. Martel, Laura A. Kelter

Industries that were affected by intense price competition and the weak worm economy suffered in 1999. Particularly affected by world economic conditions were industries that produced commodities rather than services. Most commodities underwent a slow price recovery from 1998 lows,(12) although overall, commodity prices remained below 1997 levels. While fuel prices rebounded strongly over the year, prices of many other goods were still making up for lost ground.

Employment in mining exhibited a weakness similar to that of a year earlier, as low oil prices continued through the first quarter of 1999. After plunging 32 percent in 1998, oil prices made nearly a full recovery by the fourth quarter of 1999. The recovery of employment, however, was only modest. (See chart 3.) Oil and gas companies continued to streamline operations. A number of mergers that took place in 1999 held employment gains to a minimum, as domestic companies strove to be more cost competitive with overseas suppliers.

[Chart 3 OMITTED]

The steel-producing industry also did not recover from 1998's price declines. While the bulk of the declines occurred in 1998, the recovery in prices has been slow. In mid-1999, steel production was almost unchanged over the year, and capacity utilization actually fell slightly. The U.S. International Trade Commission determined that domestic steel producers had been unfairly harmed by the flood of cheap imports, and then the United States negotiated agreements with Russia and Brazil to limit steel imports from those countries. Demand for domestically produced steel improved, and by the end of the year, both steel production and capacity utilization were up from 1998 levels. Employment in the primary metals industry recovered slightly over the fourth quarter, after declining by 14,000 during the first 9 months of the year.

Weakness in Southeast Asian and emerging economies reduced the demand for U.S. exports, particularly of industrial machinery, electrical equipment, and transportation equipment. These three industries account for 30 percent of manufacturing employment, so suppressed demand for their output has a large impact on overall manufacturing. An improvement in the performance of the Asian economies in 1999 coincided with a moderation in declines in monthly U.S. manufacturing employment by midyear. (See chart 4.) Employment declines in electrical and electronic equipment eased greatly in 1999 compared with 1998 (see chart 5), as job gains in the second half of the year nearly offset continued losses in the first half. In contrast, apparel and other textile products fared as poorly in 1999 as in 1998, losing another 9 percent of that industry's workforce and showing no signs of improvement. Employment declines accelerated in industrial machinery, with 3 times the number of jobs lost as in 1998; however, employment stabilized in the fourth quarter. Aircraft and parts also fared much worse in 1999, in part because of delayed or canceled orders from ailing countries in Southeast Asia. As was the case with the apparel industry, the job losses in aircraft continued throughout the year.