‘Flatness’ characterizes economy, MMAC reports

Flatness, particularly in the overall job trend, characterizes the current metropolitan Milwaukee area economic environment, according to a monthly report by the Metropolitan Milwaukee Association of Commerce (MMAC). Five of 14 available May indicators registered improvement from year-ago levels, down from the revised six upward-pointing indicators posted in April.
“The metro area is struggling to keep area employment levels on a growth path,” said Bret Mayborne, the MMAC’S economic research director. “Local job gains have diminished to the point where it is reasonable to assume that a fall in employment is likely in coming months.”
Highlights of the report include:
– Non-farm jobs barely registered growth in May, up only 0.1% vs. year-ago levels. May’s growth rate is the slowest recorded in the 110 consecutive months since the last year-over-year employment declines registered for the metro area in March 1992.
– Among major industry sectors, growth in the number of service jobs (compared to year-ago levels) proved to be the primary source of May’s small job gains. Conversely, both the manufacturing and wholesale and retail trade sectors posted continuing job declines.
– Manufacturing production worker indicators also pointed downward. The length of the average workweek for such workers fell 3.1% (vs. May, 2000), while their average weekly earnings fell 1.3%.
May’s seasonally adjusted jobless rate of 4.2% is slightly higher than both April’s 4.1% rate and the 4% rate posted one year ago. Currently, the metro area’s jobless rate is higher than the state’s 4.1% rate but lower than the nation’s 4.4% rate.
Indicators: May, 2001 vs. May, 2000
Employment growth in the metro area has largely ground to a halt. May’s 0.1% gain, to 870,100 non-farm jobs represents a net gain of only 600 jobs from year-ago levels and marks the third consecutive month in which the rate of employment growth has declined. This trend suggests that job declines may be registered in future months.
May’s employment growth was supported almost solely by gains in the service sector. Service jobs rose at a 1.8% pace in May, pushing service employment to 291,800. Nonetheless, May marks the fourth consecutive month in which its rate of growth has slowed. Job gains were also recorded in the “other employment” sector (construction, transportation & public utilities, finance, insurance & real estate, and government sectors) but at a significantly slower pace than those posted in the service sector. Jobs in the “other employment” sector rose at a 0.4% rate in May, matching April’s level of growth.
Small employment declines were posted in the wholesale and retail trade sector. Trade job levels fell 0.2% in May (to 182,700). May marks this sector’s third consecutive year-over-year decline, all of which fell under 1%.
Job declines in the manufacturing sector have steepened over the course of 2001. On a year-over-year basis, manufacturing jobs fell at a 3.1% rate, up from the 1.2% decline posted in January. Nationally, manufacturing jobs fell 3.3% over the same time period.
Production worker indicators were likewise negative. The length of the average workweek for manufacturing production workers averaged 40.1 hours in May, a 3.1% decline. Average weekly earnings for such workers fell 1.3%, to $632, its 14th consecutive year-over-year decline. The average weekly payroll for production workers in aggregate fell 5.4%, to $68.7 million.
Two of three area housing and real estate indicators pointed upward in May. Mortgages recorded in Milwaukee County increased 23.3%, to 6,052 – its fourth consecutive increase. Existing home sales in the metro area rose for the third time in four months, up 2.4% in May, to 1,426 New dwelling unit permits issued in the metro area fell for the ninth consecutive month. Permits numbered 420 in May, a 17.8% fall.
New car registrations fell in May, after consecutive months of increases. Registrations numbered 4,268 for the month, a 9.3% decline. Air passenger count revisions to 2001’s prior months placed usage figures for Mitchell International Airport in a better light. On a year-over-year basis, passenger totals have now risen in two of 2001,5 first five months. Nonetheless, air passenger totals declined in May, numbering 482,374, a 3.5% fall from one year ago.
July 20, 2001 Small Business Times, Milwaukee