- The Washington Times - Friday, June 6, 2003

The numbers on unemploymend released last week are bleak. Nevertheless, the Department of Labor employment report included some encouraging information.

The U.S. unemployment rate increased by 0.1 percentage point in May to 6.1 percent. The rate of unemployment had not reached that level since July 1994. Meanwhile, the number of unemployed workers has increased by nearly 3.5 million. For the first time since January 1993, the number of unemployed workers in the United States reached 9 million last month. Major revisions of nonfarm payroll data revealed that payroll employment has declined by 2.5 million since its peak in February 2001. Over the same period, private employment declined by 3.1 million jobs, the department reported. In May, payrolls shed 17,000 jobs.

The encouraging news came in the revised data, for example, which strongly indicated that the deterioration in the labor market since January has not been nearly as severe as first reported. Previous employment reports this year revealed that nonfarm payrolls had jettisoned a total of 525,000 jobs during February (353,000), March (124,000) and April (48,000). Revised data nearly cut this figure in half, reducing it to 272,000 lost jobs, all of which were eliminated in February and March. In addition, in contrast to the three previous blockbuster reports, which provided data much bleaker than anticipated, the 17,000 jobs reported yesterday to have been lost in May actually fell below a projected job loss of 30,000.

Other recent economic data were mixed, as well. The Institute for Supply Management (ISM) reported that, while the overall manufacturing sector failed to grow in May, its pace of contraction had slowed significantly. In addition, both the ISM’s new-orders index and production index indicated changes from contraction during the two previous months to growth in May.

Federal Reserve Chairman Alan Greenspan delivered a cautiously optimistic speech on Tuesday, and the recent data seemed to support his view. With a little more help from the Fed, the economy’s lackluster growth rate might be poised to accelerate.

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