Jobs forecast appears grim
Published 9:00 pm Sunday, May 20, 2001
By Frank Swoboda
The Washington Post
WASHINGTON — Hiring will continue to slow down in almost every sector of the nation’s economy throughout the summer months at a level rivaled only by the months preceding the recession of 1990, according to an employment survey released Sunday.
In the manufacturing sector the numbers are even worse, rivaling those at the start of the recession that took place in the early 1980s, said Jeffrey Joerres, president of Manpower Inc., the employment firm that conducted the survey.
The report is based on telephone interviews with nearly 16,000 public and private employers in 486 job markets in the nation. Manpower has been conducting the quarterly Employment Outlook Survey for 25 years. Although the company is known as one of the world’s largest employers of temporary workers, the survey involves the outlook for permanent employees.
The report shows 59 percent of the employers surveyed expect no change in their employment levels during the July-to-September period, while another 9 percent said they are planning workforce reductions and another 5 percent said they were undecided.
The latest survey comes as overall unemployment is rising, reaching 4.5 percent nationally in April, still a relatively low figure for the U.S. economy. The unemployment rate reached a three-decade low of 3.9 percent last fall.
The rise in unemployment reflects a snowballing increase in layoffs throughout the economy in recent months, particularly in the technology sector. Although most of the layoffs have been the result of poor corporate performance and a sharp slowdown in the nation’s economic growth, some of the layoffs are the result of preventive actions by companies no longer willing to wait for a full-fledged recession before letting employees go.
So far this year, companies have announced 570,370 layoffs, according to Challenger, Gray and Christmas, the Chicago-based outplacement firm. Just in April, there were 165,000 layoff announcements, 70,000 in the technology sector of the economy.
"It’s the tech sector that’s led the way," said John Challenger, chief executive of the outplacement firm. "We’ve now imported the job volatility of the tech sector to the rest of the economy."
The Labor Department reported that payroll employment fell by 223,000 jobs in April after a 53,000 job decline the previous month. The number of unemployed persons looking for work has risen by 870,000 since last October to 6.5 million.
The weakest regional employment outlook for the coming quarter is the Midwest, primarily because of the manufacturing employment in cities such as Chicago, Detroit and Cincinnati, according to the Manpower survey.
On a nationwide, industry-by-industry basis, the survey showed that durable goods manufacturing were the hardest hit, followed by nondurable manufacturing. A durable good is anything expected to last more than three years. The last time the outlook was as bleak for a third quarter was 1983, according to the survey.
