The Economic Data Global Express (e-EDGE)

v.6 n.10       Released Mar. 11, 2002
Produced by the Los Angeles County Economic Development Corporation as a public service to the global community.

U.S. LABOR MARKETS A LITTLE BETTER IN FEBRUARY

     The Bureau of Labor Statistics released its monthly labor market report last Friday showing that labor market conditions improved slightly in February.  The Bureau's household survey revealed that the nation's unemployment rate edged down to 5.5% in February from 5.6% in January and 5.8% in December.  However, the Bureau commented that February's rate was "essentially unchanged" from the previous month because the decline in unemployment was so small, only 31,000 workers (in a total labor force of 142 million).  Jobless rates changed little for most age, race, and ethnic categories except Hispanics, whose unemployment rate fell to 7.1% from 8.1% in January.  In addition to rising joblessness, people are unemployed for longer periods of time.  The median duration of unemployment has risen noticeably, from 6.0 weeks in February 2001 to 8.1 weeks last month.  Over the same period, the number of "long-term" unemployed--jobless for 15 weeks or more--surged from 1.5 million to 2.6 million people.  Last week Congress passed and the President signed a bill to extend unemployment benefits for another 13 weeks (from 26 weeks currently), a timely action.
     The Bureau's survey of employers showed that nonfarm employment increased by 66,000 jobs in February following revised declines of 126,000 and 106,000 jobs in January and December respectively.  Last month's rise in employment was the first "plus" figure since July 2001.  However, several special factors boosted the total employment change above zero.  In particular, mild weather meant that more construction activity took place last month, requiring more workers.  Also, retailers, who had hired fewer holiday season employees than usual last year, fired fewer than usual in January and February.  In both cases, adjusting the actual figures--both declines--for "normal" seasonal variation resulted in seasonally adjusted increases in employment.  Finally, vehicle manufacturers returned 26,000 workers to their February payrolls after January shutdowns ended.  These three industries collectively added 106,000 jobs in February suggesting that all the others reduced employment by a net 43,000 jobs.
     Even in the other industries, however, there were some small but encouraging signs suggesting that industry trends are beginning to shift out of reverse and into forward gear.  The air transportation industry added 5,000 employees in February following cuts of 111,000 during the fourth quarter 2001.  Also, help supply firms, which reduced employment by a whopping 447,000 over the past year, took on 14,000 more workers last month.  All in all, it looks like labor markets could be close to bottom.  At last!  (Nancy D. Sidhu)
PR: http://www.bls.gov/news.release/empsit.nr0.htm
 

ECONOMY "MOVING THROUGH A TURNING POINT"...

     Fed Chairman Greenspan's cautiously optimistic comments lifted the spirits of traders on Wall Street, and economic data released last week do seem to support his view.  Factory orders rose by 1.6% in January while shipments rose by 2.0%.  Inventory liquidation continued with a 0.6% decline in inventory levels.  Meanwhile, wholesale sales rose by 1.2% in January while inventories fell by 0.2%.  Consumers, whose spending saved the economy from a full-blown recession, piled on more debt in January with an 9.3% increase (at an annualized rate), up from just 1.3% in December.  Record low auto loan rates helped fuel consumer borrowing.  (George Huang)
Factory orders PR: http://www.census.gov/indicator/www/m3/index.htm
Wholesale trade PR: http://www.census.gov/svsd/www/whltext.html
Consumer borrowing PR: http://www.federalreserve.gov/releases/g19/Current/
 

WATCHING FOR THE LOCAL RECOVERY

     With the general feeling that a recovery is underway, we are watching various indicators of activity in the state.  One is average weekly hours worked in manufacturing , and the other is overtime hours in manufacturing.  The latest data is through January, and there was no stirring in either indicator.  The factory work week averaged 40.1 hours in January, down from 40.8 hours last year.  Overtime hours came in at 3.8 hours per week, compared with 4.3 hours in January 2001.  (Jack Kyser)
Weekly work hours data: http://www.calmis.cahwnet.gov/file/indh&e/allawh02.xls
 

LOCATION FILMING ACTIVITY STILL WEAK IN FEBRUARY

     According to the Entertainment Industry Development Corporation, off-lot filming activity in Los Angeles remained weak in February.  Comparisons with early 2001 of course are impacted by the rush to stockpile product in anticipation of labor problems.  The industry is still feeling the effects of the "de facto strike" that started last year.
     Total location production days during February were down by 29.3% over the year, with the biggest hit found in "features," 408 days compared with 1,155 last year.  In 1999, February had 870 location days.  Commercial production was down by 8.4% while TV was off by a comparatively modest 4.7%.  Features and commercial activity were both up over the January numbers.  Industry observers note that the ramp-up in production has not yet shown up on the streets, although we were threading our way around a location shot this morning.  The March numbers will be interesting.  (Jack Kyser)
 

FIRST QUARTER 2001 TAXABLE RETAIL SALES

     While it's like looking in the rear view mirror, first quarter 2001 taxable retail sales data is now available.  For California, sales were up by 5.3% over the year, a significant slowdown from 2000's 12.3% increase.  Los Angeles County posted a 4.0% gain, compared with an 11.1% increase in 2000.  Orange County came in with a 4.6 gain, versus 2000's 10.7% gain.
     Riverside County recorded a 7.2% gain in the first quarter, compared with a 14.1% increase for 2000.  San Bernardino County's numbers were 5.9% and 12.9%.  San Diego County had a 6.5% gain over the year in 2001's first quarter, compared with a 12.2% advance for all of 2000.  Ventura County came in at 6.7%, versus 10.6% in 2000.   Estimates for the state indicate a sharp slowing over the balance of 2001, but again we wait for the local numbers.  (Jack Kyser)
Data: http://www.boe.ca.gov/news/tsalescont01.htm
 

A LITTLE BETTER NEWS IN TOURISM

     The Los Angeles Convention & Visitors Bureau publishes a monthly "Travel Pulse," and it seemed to be beating a little faster in January.  Among the indicators tracked are "attractions" attendance and museum attendance.   The latter was up by 24.2% over the year in January, after four consecutive monthly declines.  Museum attendance was also up in January, but by a modest 1.4%.  For additional information, contact the Bureau's Tourism Research Department at research@lacvb.com.  (Jack Kyser)
 

KMART CLOSURES

     KMart announced its intention to close 284 underperforming stores and lay off 22,000 employees.  Eight of the 284 stores are in the Southern California market, and two more are in San Diego.  The blood bath in retail sector continues, and KMart will not be the last casualty.  Most discounters (e.g., Wal-mart and Target) are posting strong growth while many traditional retailers are struggling to avoid a visit to the bankruptcy court.  (George Huang)
PR: http://www.kmartcorp.com/corp/story/pressrelease/news/pr020308b.stm
 

QUICK STATS:

* BLS: US unemployment rate for 2/02: 5.5% (1/02: 5.6%)
* BLS: US employment for 2/02: +66,000 (1/02: -126,000)
* BLS: US labor productivity for 4Q01: +5.2% (3Q01: +1.1%)
* BLS: US unit labor costs for 4Q01: -2.7% (3Q01: +2.6%)
* BTM/Schroders: US chain store sales for 2/02: +6.2% (1/02: +5.1%)
* Cal. Assn. of Realtors: California housing affordability index for 1/02: 32% (12/01: 32%)
* Cal. Assn. of Realtors: LA County housing affordability index for 1/02: 34% (12/01: 36%)
* Census: US new factory orders for 1/02: +1.6% (12/01: +0.7%)
* Census: US factory shipments for 1/02: +2.0% (12/01: +0.6%)
* Census: US factory inventories for 1/02: -0.6% (12/01: -0.9%)
* Census: US unfilled factory orders for 1/02: -1.4% (12/01: -1.1%)
* Census: US wholesale trade for 1/02: +1.2% (12/01: -0.5%)
* Census: US wholesale inventories for 1/02: -0.2% (12/01: -0.5%)
* Federal Reserve: US consumer credit for 1/02: +9.3% annualized rate (12/01: +1.3% a.u.)

The Economic Data Global Express (e-EDGE) is a free service of the Los Angeles County Economic Development Corporation (LAEDC). Permission to quote any proprietary part of this release is granted given proper credit. Distribution is allowed provided that no modifications are made to the original content. Sponsors of this service do not necessarily endorse all opinions stated herein. For more information, please e-mail to research@laedc.org. To contact LAEDC, please call 213-622-4300.

Subscribe to e-EDGE and receive current economic news and major developments.  Your e-mail address will not be disclosed to any outside party (including e-EDGE sponsors) under any circumstances.

To send us comments regarding e-EDGE, please e-mail to research@laedc.org.