BLS Daily Report

[Richardson_D <Richardson_D@xxxxxxx>]

> BUREAU OF LABOR STATISTICS, DAILY REPORT, SEPTEMBER 20, 2001:
>
> The Federal Reserve in its latest "Beige book" finds that business
> activity was sluggish in nearly all of the Fed's 12 regions -- if not
> weakening -- in the 6 weeks period prior to the September 11 terrorist
> attacks in New York and Washington, D.C.  In the aftermath of the attacks,
> economists predict that consumer confidence will be shaken.  "Merchants in
> over half the districts expected either flat sales or only moderate growth
> for the remainder of the year, with one contact in the Boston region
> describing the retail outlook as 'grim'", the Fed said.  "Virtually all
> regions reported that new orders and production were weak in the
> manufacturing sector, and nearly one-half suggested that conditions had
> deteriorated further...but there were positive signs contained in a few
> district reports," the central bank said.  Businesses reported that wage
> costs were under control as labor demand continued to ease.  In the
> Cleveland district, firms said unions were trading off negotiated wage
> increases in exchange for job security provisions (Daily Labor Report,
> page D-8, The New York Times, showing district by district data on a map
> chart, page C8; USA Today, with district by district report, page 7B).
>
> According to data compiled by the Bureau of National Affairs in the first
> 38 weeks of 2001, newly bargained contracts in the manufacturing industry
> provided a weighted average first year gain of 3.1 percent, compared with
> 3.3 percent in 2000, while agreements in the nonmanufacturing (excluding
> construction) sector produce a weighted average increase of 3.9 percent,
> compared with 4 percent in 2000.  The current median manufacturing
> increase was 3 percent, the same as that reported a year ago and the
> median nonmanufacturing increase was 4 percent, compared with 3.5 percent
> last year (Daily Labor Report, page D-10).
>
> The number of Americans lining up for first time unemployment benefits
> fell last week, the government said in a report that did not yet reflect
> the impact of the attacks on the World Trade Center and the Pentagon.  The
> Labor Department said the number of initial jobless claims fell 49,000 to
> 387,000 in the week ended September 15.  The department said the large
> decline resulted from seasonal adjustments. The 4-week moving average of
> claims, considered a more reliable barometer of employment conditions
> because it irons out weekly fluctuations, dropped to 409,000 from 412,250,
> still showing signs of a weak labor market as the economy struggles to
> stay out of recession (Reuters,
> http://www.usatoday.com/money/economy/2001-09-20-jobless.htm).
>
> The first wave of layoffs after last week's terrorist attacks hit
> airlines, their suppliers and related industries.  Analysts anticipate
> further waves in the weeks to come.  Just how much the layoffs will spread
> depends on the longer term impact on consumer and business confidence.  So
> far that remains unclear. Industries that depend on travel, such as
> hotels, resorts and casinos, are likely to be the hardest hit in the
> coming months, and are actually planning for that eventuality. But their
> reductions are unlikely to come in layoff announcements because high
> turnover makes it easy to cut jobs through attrition (The Wall Street
> Journal, page A2).
>
> Large-scale layoffs in the wake of last week's terrorist attack could
> damage an already fragile economy.  "Obviously layoffs are a drag on the
> economy," says the chief economist with A.G. Edwards, the St. Louis-based
> investment firm.  "But the more important thing is whether they will be
> offset or cushioned by anything else, and it appears they will be."  The
> federal government is stepping up its spending for both national security
> and rebuilding efforts, which will pump tens of billions into the economy
> in the next year, he noted. The chief economist with Bank One Corp. agrees
> that layoffs could push the economy into a "mild recession", but she
> believes that those affected will be bailed out by the government.  Others
> such as cell phone-makers, defense contractors and security companies will
> be enjoying a boom time, hiring thousands, she predicts.  "After we get
> through these losses, there are some medium term gains," the economist
> says.  The number of people who were laid off hit 1.1 million in August,
> according to the Bureau of Labor Statistics, up from 907,000 in the same
> month last year.  This week's layoffs will make the September number
> eye-popping, economists agree.  But some economists and labor union
> officials are arguing that the numbers may not be as bad as they first
> appear (Susan Chandler and Bruce Japsen, Chicago Tribune).
>
> Spurred by President Bush's call for 35,000 reserves, the nation's
> employers and institutions are gearing up for the possibility that some of
> their workers could be activated in the weeks ahead as U.S. leaders decide
> on a course of action in the aftermath of terrorists attacks.  Thus far,
> 217 units responsible for port security have been activated around the
> country and assigned to cutters monitoring the coasts of Boston and New
> York City, the Coast Guard said. 'The larger the company, the more
> necessary it is to have a plan for replacing people who are in the
> reserves, said the president of a Boston management consulting firm.
> Typically, reservists employed by government agencies such as Veterans
> Affairs are entitled to up to 17 days of paid military leave annually,
> legal specialists say.  If the leave is not used, it can be carried
> forward and applied during a crisis.  This means that a reservist who
> accrued 13 days last year and is eligible for 17 days this year could
> receive a maximum of 30 days paid leave.  In cases where an employer
> continues to pay the individual's salary, the worker would receive two
> sets of paychecks, one from the military and one from the employer --
> during the 30-day period.  Although Federal law does not require that an
> employer fully compensate a reservist who is on duty, some do. Others
> offer health care coverage to the families of reservists and make up the
> difference between military pay and the company salary.  Under Federal
> law, an employee who leaves a full-time job to perform military service
> for up to 5 years retains his or her reemployment rights. That 5 year
> period can be extended under certain circumstances. What happens if a
> worker is laid off while on military leave?  "If the layoff would have
> occurred anyway, the worker has no recourse," a lawyer said.  "But if the
> individual was laid off because he was on active duty, the employer could
> be required to reinstate the reservist" (Diane E. Lewis, Boston Globe).
>
> DUE OUT TOMORROW:  Regional and State Employment and Unemployment:  August
> 2001

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