e-EDGE is now available as an RSS feed. [Click here to subscribe to it.]The Bureau of Labor Statistics released its latest U.S. Labor Market Report on Friday, covering the U.S. employment situation in May. Total nonfarm employment fell by -49,000 jobs in May. This was worse than April’s monthly decline of -28,000 jobs but below the first quarter average decline of –82,000 jobs. In total, U.S. employment has shrunk by -324,000 workers over the past five months, wiping out the gains of the last four months of 2007.
Government payrolls increased by 17,000 employees last month; so private-sector payrolls dropped by -66,000 jobs, the sixth consecutive monthly decline. Only two of the ten major industry groups reported higher job counts in May. The “plus” industries were education & health services (up by +54,000 jobs over the month) and leisure & hospitality (with an increase of +12,000 jobs). The biggest payroll declines were reported by professional & business services (-39,000 jobs, mostly reflecting the loss of -30,000 temporary help positions), construction (down by -34,000 jobs over the month), retail trade (-27,000 jobs, with losses at building material & garden supply stores and department stores), and manufacturing (-26,000 jobs).
Compared with 12 months ago, nonfarm employers have added 236,000 workers to their payrolls, an increase of only 0.2%. Five private-sector industry groups reported higher payrolls over the year. The biggest job gainers were education & health services (+577,000 jobs), leisure & hospitality (+272,000 jobs), and professional & business services (+69,000 jobs over the year, after temporary help firms shed -150,000 workers). The construction and manufacturing sectors continued in the red, falling by -386,000 jobs and -341,000 jobs respectively compared to May 2007. Note that residential construction employment has declined by -316,000 jobs over the year; so payrolls in nonresidential and heavy construction have fallen by a combined -70,000 workers over the past twelve months.
In the separate BLS survey of households, the U.S. unemployment rate bounced up to 5.5% in May from 5.0% in April and 5.1% in March. The nation’s jobless rate was 4.5% in May 2007; so the unemployment rate has risen by a full percentage point over the past 12 months. Among the major demographic groups, the jobless rates for adult men and women both rose by +0.9 percentage points over the year, while the rate for teenagers jumped up by +2.9 percentage points. Over the same period, the unemployment rate for whites and Asians both increased by +0.9 percentage points, while joblessness among blacks was up by +1.3 percentage points. The rate of unemployment among Hispanic workers has risen by +1.1 percentage points.
While the jobless rate has been rising gradually since March 2007 (which was 4.4%), the jump in May was likely exaggerated by special factors that boosted the apparent unemployment rate among young people leaving school and looking for work. Some of this may reverse in June and July, but not all.
On the employment side of the ledger, job counts are continue to fall in many sectors of private industry, with the steepest declines still in activities related to housing construction, automotive and apparel/textiles manufacturing, and mortgage finance. These sectors lost -40,000 jobs in May and have shed -603,000 workers over the past 12 months. The only sectors reporting consistent employment gains are education & health care (which seem to grow no matter what happens in other parts of the economy) and leisure & hospitality. Many business firms are simply unwilling to hire more workers, reflecting a high level of uncertainty about the outlook, not just for the economy in general but also for their own businesses. (Nancy D. Sidhu)
The Bureau of Labor Statistics released an upward revision of U.S. productivity in the nonfarm business sector in the first quarter of 2008, up to +2.6% quarter-over-quarter, SAAR (versus the preliminary reading of +2.2%). U.S. workers produced more and worked less during the first quarter of 2008. Final output grew by a revised +0.7% during the first quarter, while hours worked stayed the same at +1.8%. Hourly compensation increased by +4.9%. Increases in compensation have been going down in the past few quarters, reflecting the softening labor market. Unit labor costs remained unchanged from the preliminary reading of +2.2%, below the +3.1% increase in 4Q 2007.
On a year-over-year basis, final productivity in the nonfarm business sector was better than first reported, increasing by +3.3%. Output went up by +2.7%, while hours worked declined by -0.6%. Nonfarm unit labor costs were up by just +0.7%. Unit labor costs have softened in the past few quarters with no signs of inflation-push pressures, good news for the Fed. (Candice Flor Hynek)
Every year the Journal of Commerce publishes a roster of the top importers and exporters measured by the number of ocean containers involved. It’s always fun to see which Southern California firms make the listing.
In 2007, the top importers via ocean containers were (with their national rank):
| Rank | Company | City |
| 16 | Red Bull North America Inc. | Santa Monica |
| 28 | Mattel Inc. | Santa Monica |
| 36 | Nestle USA Inc. | Glendale |
| 40 | Yamaha Motor Corp. USA | Cypress |
| 43 | American Honda Motor Co. | Torrance |
| 46 | Coaster Co. of America | Santa Fe Springs |
| 61 | Toyo Tire & Rubber Co. | Cypress |
| 79 | Giti Tire Corp. | Rancho Cucamonga |
| 89 | Kawasaki Motors Corp. USA | Irvine |
| 93 | Yokohama Tire Corp | Fullerton |
| 96 | American Suzuki Motor Corp. | Brea |
Southern California had a sizable presence on the top 2007 exporters roster, with 16 firms. Many of them export waste paper and other recyclables and will be noted with a (R). (Jack Kyser)
| Rank | Company | City |
| 1 | American Chung Nam ( R ) | City of Industry |
| 11 | Potential Industries Inc. ( R ) | Wilmington |
| 12 | Newport CH International LLC ( R ) | Brea |
| 14 | Cedarwood-Young (Allan Co.) ( R ) | Baldwin Park |
| 18 | JC Horizon Ltd. ( R ) | Arcadia |
| 20 | Mega Fiber Inc ( R ) | Brea |
| 21 | Dennison International Co. ( R ) | Diamond Bar |
| 35 | Yao Yang Enterprises/Sunshine Paper ( R ) | Los Alamitos |
| 36 | Sino Paper Inc. ( R ) | Fullerton |
| 39 | Rio Tinto Minerals | Valencia |
| 63 | Tzeng Long USA Inc. ( R ) | Commerce |
| 71 | Gomes Enterprises LLC ( R ) | Compton |
| 75 | Resources Management Cos. ( R ) | City of Industry |
| 86 | Honda North America | Torrance |
| 89 | Advanced Steel Recovery ( R ) | Fontana |
| 91 | Jetway International ( R ) | Pomona |
| 93 | Cementhai SCT USA Inc. | Torrance |
Most people are only too aware that gasoline prices have soared to ridiculously high levels in recent months. However, automotive dealers are bearing more pain than the rest of us because their sales are falling. Last month, retail sales of light motor vehicles (cars, light trucks, vans and SUVs) were 14.3 million vehicles (seasonally adjusted annual rate, or SAAR), down by -1.0% from the revised 14.4 million vehicles reported for April. That doesn’t sound too bad. But vehicle sales during the April-May period were down by -5.8% from the pace of first quarter 2008 (at 15.2 million units), which in turn had dropped by -5.5% from the 4th quarter 2007 level of 16.1 million light vehicles sold.
Worse yet, virtually all of the decline in total vehicle sales has come at the expense of trucks made by the domestic “Detroit 3” manufacturers. Total vehicle sales in April-May were running about -1.85 million units (SAAR) below the level of late last year, a decline of -11.5%. However, sales of domestic light trucks were down by -1.79 million units over the same period, down by a dreadful -25.9%. It’s no wonder the Detroit 3 are reducing production schedules and employment at many truck plants. However, the economic impact of this downturn has spread beyond the Midwestern region. Domestic car/truck dealers all over the U.S. are having trouble selling gas-hungry trucks whether new or used. (Nancy D. Sidhu)
There wasn’t much good news in the April numbers from local airports. At LAX, total traffic declined by -5.8% over the year. There was no support from international activity, which dropped by -2.5%. At Ontario, total traffic moved down by -7.2%, with the international component off by -33.6%. Palmdale Regional handled 2,105 passengers during April, the second month in a row with over 2,000 persons using the facility.
The John Wayne/Orange County Airport saw April activity slide down by -9.6% over the year, while Long Beach Airport posted a -9.1% decline. As reported earlier, Palm Springs International saw a -4.8% drop in April passengers over the year.
The April air cargo numbers were also down, with LAX recording a -3.1% decline in tonnage over the year, while Ontario saw a -0.5% drop. The international air freight numbers were a tad better but unusual. At LAX, total international tonnage increased by 2.2% over the year, with exports up by 7.6%. At Ontario, total tonnage in April was up by 27.5% over the year, with imports up by 25.9% over the year and exports 31.5% ahead. (Jack Kyser)
Tuesday, June 12
Asian Business League Southern California: "The R Word": Do's and Don'ts in a Real Estate Downturn: LAEDC Chief Economist Jack Kyser will address the critical problems facing the real estate, finance and construction industries, including falling home prices, record foreclosures, and the capital markets turmoil. To register and for more information www.ablsocal.org
Tuesday, June 17
Los Angeles National Association for Business Economics and the Federal Reserve Bank of San Francisco: “Term Auction Facilities and Other Federal Reserve Bank Efforts to Increase Liquidity.” A review of efforts by the Fed over the past several months to provide liquidity to lending institutions and stabilize the national and global financial markets with Donald Lieb, Group VP and CFO Finance and Risk Management Group of the Federal Reserve Bank of San Francisco. Presentation of the 2nd Annual Robert T. Parry Award, honoring a local economist for his or her contribution to their community and LA NABE. The event will be held at the Los Angeles Branch of the FRBSF. Space is limited. Deadline to register is June 9th. To register and for more information www.lanabe.org
Wednesday, July 16: 2008 Mid-year Economic Forecast and Updates
In addition to the Mid-year Economic Forecast updates, the LAEDC and its subsidiary, the World Trade Center Association Los Angeles - Long Beach, will also unveil the final report of the LAEDC's Foreign Direct Investment Study, highlighting the economic impact to the regional economy. 2 panels of experts to include: James Dibbo, British Telecom; John Burns, John Burns Rela Estate Consulting; Richard Weiss, City National Bank; Vance Baugham, WTCA LA-LB; and Jack Kyser, LAEDC.
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.