Monday, January 28, 2008

Manufacturing had 462 mass layoff events in December


In December, employers took 1,433 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 on January 24. Each action involved at least 50 persons from a single employer; the number of workers involved totaled 141,750 on a seasonally adjusted basis. December layoff events were the highest since September 2005 (which reflected the impact of Hurricane Katrina) and were the highest for the month of December since 2002.

The number of mass layoff events in December 2007 increased by 104 from the prior month, while the number of associated initial claims increased by 2,079. In December, 462 mass layoff events were reported in the manufacturing sector, seasonally adjusted, resulting in 58,108 initial claims. Over the month, mass layoff activity in manufacturing increased by 48 events, and initial claims increased by 1,143.

For all of 2007, the total numbers of mass layoff events, at 15,493, and initial claims, at 1,598,875, were higher than in 2006, when the totals were 13,998 and 1,484,391, respectively. The finance and insurance industry registered series highs for mass layoff events and initial claims in 2007. This reflected increased layoffs in the credit intermediation and related activities industry, which includes real estate credit, commercial banking, and mortgage and non-mortgage lending brokers. For all of 2006, layoff events had hit a series low, and the number of initial claimants was the lowest reported since 1996.

The national unemployment rate was 5.0 percent in December, seasonally adjusted, up from 4.7 percent in the prior month and from 4.4 percent a year earlier. Total non-farm payroll employment increased by 18,000 in December and by 1.3 million from a year earlier.

Industry Distribution (Not Seasonally Adjusted)The 10 industries reporting the highest numbers of mass layoff initial claims, not seasonally adjusted, accounted for 35 percent of all such claims in December. The industry with the highest number of initial claims was highway, street and bridge construction with 14,684, followed by food service contractors (12,518), school and employee bus transportation (11,362), and temporary help services (9,745). Together, these four industries accounted for 22 percent of all initial claims due to mass layoffs during the month.

The manufacturing sector accounted for 32 percent of all mass layoff events and 41 percent of all related initial claims filed in December; a year earlier, manufacturing made up 33 percent of events and 41 percent of initial claims. In December 2007, the number of manufacturing claimants was highest in transportation equipment manufacturing (31,910, largely in heavy duty truck manufacturing), followed by food manufacturing (10,267) and machinery manufacturing (6,864).

Construction accounted for 21 percent of mass layoff events and 16 percent of initial claims in December, primarily from heavy and civil engineering construction. Administrative and waste services comprised 10 percent of events and 9 percent of initial claims, primarily from temporary help services and professional employer organizations. Accommodation and food services made up 7 percent of all mass layoff events and 8 percent of related initial claims, mainly from food service contractors. Seven percent of all mass layoff events and related initial claims filed were from transportation and warehousing, largely from the school and employee bus transportation industry.

Due, in part, to a calendar effect, the number of mass layoff events in December, at 2,167, was down by 82 from a year earlier, and the number of associated initial claims decreased by 30,289 to 224,214. (December 2007 contained four weeks compared with five weeks in December 2006.) The average weekly number of events in December 2007 compared with December 2006 increased from 450 to 542, and the average weekly initial claimants increased from 50,901 to 56,054. Both weekly averages are at the highest levels for the month of December since 2002.

The largest over-the-year increases in December 2007 average weekly initial claims associated with mass layoffs occurred in food manufacturing (+855), specialty trade contractors (+804), machinery manufacturing (+581), motion picture and sound recording (+534), construction of buildings (+526), and food and drinking places (+513). The largest decrease occurred in electrical equipment and appliance manufacturing (-766).

Geographic Distribution (Not Seasonally Adjusted)
Among the 4 census regions, the highest number of initial claims in December due to mass layoffs was in the Midwest, 97,346. Two industries – transportation equipment manufacturing, and heavy and civil engineering construction – accounted for 32 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, 47,505, followed by the West with 42,504 and the Northeast with 36,859.

The number of initial claimants in mass layoffs decreased over the year in all four regions and in eight of the nine divisions, due, in part, to a calendar effect. However, all four regions experienced over-the-year increases in average weekly initial claims – the Midwest (+2,438), the South (+1,072), the Northeast (+1,067) and the West (+577). Seven of the nine divisions had over-the-year increases in average weekly initial claims, led by the East North Central (+2,900).

California recorded the highest number of initial claims in December due to mass layoff events (30,590), reflecting layoffs in motion picture and sound recording industries and in administrative and support services. Other states with large numbers of mass layoff-related claims were Michigan (25,005), Pennsylvania (15,993), Illinois (15,012) and Ohio (14,909). These five states accounted for 48 percent of all mass layoff events and 45 percent of all initial claims for unemployment insurance in December.

The number of initial claimants in mass layoffs decreased over the year in 33 states and the District of Columbia, due, in part, to a calendar effect. Twenty-five states reported over-the-year increases in average weekly initial claims associated with mass layoffs, led by Michigan (+1,683) and Pennsylvania (+1,109). For Michigan, the highest average initial claims occurred in transportation equipment manufacturing, and for Pennsylvania, food manufacturing had the highest activity. States with the largest over-the-year decreases were New York (-671) and Virginia (-596).

Read the full report and view all of the data tables by clicking on the link below:

ftp://ftp.bls.gov/pub/news.release/mmls.txt

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