Manufacturing accounts for 33% of U.S. mass layoff events

Author: RP news wires
In December, employers took 1,201 mass layoff actions, seasonally adjusted, as measured by new filings for unemployment insurance benefits during the month, the U.S. Department of Labor’s Bureau of Labor Statistics reported January 24. Each action involved at least 50 persons from a single establishment, and the number of workers involved totaled 133,818, on a seasonally adjusted basis. The number of mass layoff events decreased by 19 from the prior month, and the number of associated initial claims decreased by 2,522. During December, 390 mass layoff events were reported in the manufacturing sector, seasonally adjusted, resulting in 53,828 initial claims. Both the number of events and the number of initial claims in manufacturing were lower in December than a month earlier. The national unemployment rate was 4.5 percent in December, seasonally adjusted, unchanged from the prior month and down from 4.9 percent a year earlier. Total non-farm payroll employment, seasonally adjusted, increased by 167,000 over the month and by 1.8 million over the year. Industry Distribution (Not Seasonally Adjusted) The 10 industries reporting the highest numbers of mass layoff initial claims, not seasonally adjusted, accounted for 36 percent of the total initial claims in December. The industry with the highest number of initial claims was highway, street and bridge construction with 19,021, followed by school and employee bus transportation with 14,747, and food service contractors with 13,903. Together, these three industries accounted for 19 percent of all initial claims due to mass layoffs during the month. The manufacturing sector accounted for 33 percent of all mass layoff events and 41 percent of all related initial claims filed in December; a year earlier, manufacturing made up 30 percent of events and 38 percent of initial claims. In December 2006, the number of manufacturing claimants was highest in transportation equipment manufacturing (38,811, mostly in motor vehicle manufacturing), followed by food manufacturing (8,557), and wood products manufacturing (6,359). Construction accounted for 19 percent of mass layoff events and 14 percent of initial claims in December, mostly from heavy and civil engineering construction. Administrative and waste services comprised 11 percent of events and 9 percent of initial claims filed over the month, with the majority of layoffs in temporary help services. Accommodation and food services made up 8 percent of events and associated initial claims, mainly from food service contractors. Seven percent of all mass layoff events and 8 percent of related initial claims filed were from transportation and warehousing, primarily from the school and employee bus transportation industry. Government establishments accounted for 3 percent of events and 2 percent of initial claims filed, largely from educational services. On a not seasonally adjusted basis, the number of mass layoff events in December, at 2,249, was down by 74 from a year earlier, and the number of associated initial claims increased by 245 to 254,503. The largest over-the-year increases in initial claims were reported in transportation equipment manufacturing (+4,303), machinery manufacturing (+2,585), and electrical equipment and appliance manufacturing (+1,985). For transportation equipment manufacturing, states with the largest over-the-year increases in initial claims were Kentucky (+3,826), Iowa (+2,561), Minnesota (+2,423), Virginia (+2,109) and Ohio (+2,065). The largest over-the-year decreases in mass layoff initial claims were reported in administrative and support services (-5,409), food manufacturing (-2,124) and heavy and civil engineering construction (-1,709). Geographic Distribution (Not Seasonally Adjusted) Among the four census regions, the highest number of initial claims in December due to mass layoffs was in the Midwest, 109,495. Transportation equipment manufacturing and heavy and civil engineering construction together accounted for 34 percent of all mass layoff initial claims in that region during the month. The South had the second largest number of initial claims among the regions, 54,023, followed by the West, 50,247 and the Northeast 40,738. The number of initial claimants in mass layoffs decreased over the year in three of the four regions – the West (-3,149), the Midwest (-2,167) and the Northeast (-2,159). The South experienced the only regional increase (+7,720). Five geographic divisions had over-the-year decreases in the numbers of initial claims associated with mass layoffs, with the largest decrease in the East North Central division (-7,215), followed by the Pacific division (-2,989). Of the four divisions with over-the-year increases, the largest were in the East South Central (+7,523) and West North Central (+5,048). Among the states, California recorded the highest number of initial claims filed due to mass layoff events in December (34,848), followed by Michigan (22,842), Illinois (17,195), Kentucky (15,975) and Ohio (15,848). These five states accounted for 40 percent of all mass layoff events and 42 percent of all associated initial claims for unemployment insurance. Kentucky had the largest over-the-year increase in the number of initial claims (+6,109), mostly due to layoffs in transportation equipment manufacturing. States having the next largest increases in initial claims were Iowa (+2,981), Maryland (+2,825), New York (+2,824) and Ohio (+2,789). The largest over-the-year decreases in claims occurred in Michigan (-7,614), Georgia (-4,553) and California (-4,078). Review of 2006 During 2006, 13,998 mass layoff events occurred in the nation, resulting in 1,484,391 initial claims filings for unemployment insurance. In 2005, there were 16,466 events and 1,795,341 initial claimants. The total number of initial claims for 2006 was the lowest reported for any January-December period since 1996. The 10 industries with the highest number of mass layoff initial claims accounted for 31 percent of the total in 2006. Temporary help services and school and employee bus transportation ranked 1 and 2 among these 10 industries in both 2006 and 2005. Heavy duty truck manufacturing and discount department stores entered the top 10 industries in terms of initial claims. These industries replaced motor vehicle seating and trim manufacturing and elementary and secondary schools. Manufacturing accounted for 31 percent of all mass layoff events and 39 percent of initial claims filed during 2006. A year earlier, manufacturing accounted for 29 percent of events and 37 percent of initial claims. Initial claim filings were most numerous in transportation equipment (221,383) followed by food manufacturing (62,927) and machinery manufacturing, (40,069). During 2006, the largest declines in initial claims occurred in transportation equipment manufacturing (-32,351) and food manufacturing (-13,999). The largest over-the-year increase in initial claims occurred in machinery manufacturing (+6,356). The number of initial claims filed in 2006 due to mass layoffs was higher in the Midwest (508,798) than in any other region. Layoffs in transportation equipment manufacturing accounted for 31 percent of the claims in the Midwest. Administrative and support services, machinery manufacturing, and heavy and civil engineering construction accounted for an additional 16 percent of layoffs in that region in 2006. The fewest number of mass layoff initial claims was reported in the Northeast region (254,684). In 2006, mass layoff initial claims decreased in all four of the regions. The largest declines were in the South (-172,613) and Midwest (-63,152). In 2005, the South experienced a substantial increase of initial claimants in Louisiana and Mississippi as a result of Hurricane Katrina. Among the 50 states and the District of Columbia, California recorded the largest number of initial claims filed in mass layoff events in 2006 (317,907), 21 percent of the national total. The states with the next highest numbers of initial claims were Michigan (127,964), Pennsylvania (89,559), Ohio (80,291) and New York (76,638). Fifty percent of events and 47 percent of all initial claims were from these five states. Louisiana reported the largest over-the-year decrease in initial claims (-107,685), followed by California (-42,231) and Ohio (-32,874). The largest over-the-year increases were reported in Maryland (+6,773) and Kentucky (+6,168).