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American Morning

Unemployment Figures Rise

Aired April 06, 2001 - 09:46   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
STEPHEN FRAZIER, CNN ANCHOR: Whether it leads to an early rate cut or not, those Labor Department unemployment figures are of interest to us; we're going to spend some time on them now. As Amanda mentioned, the jobless rate climbed to 4.3 percent in March; according to those figures, that's up 1 percentage point from February.

Joining us live now from Chicago is unemployment analyst John Challenger, CEO of the Chicago-based consulting firm Challenger, Gray & Christmas.

Mr. Challenger, thanks for joining us. It didn't go up a full percentage point, it's 1/10 of a percentage point, if I read the numbers right.

JOHN CHALLENGER, UNEMPLOYMENT ANALYST: Well, that's right; it's gone up to 4.3 percent. We've been expecting the number is going to start moving up; it has begun to do that. This is now the highest in 20 months, and unemployment and likely to continue to worsen as we move into 2001.

FRAZIER: Well, where is it worsening? I mean, this is not really across-the-board economic depression.

CHALLENGER: Well, one of the things this report showed is that manufacturing continues to be hit very hard; it lost jobs. Also companies, when they begin to make cuts, the first place they look is the temporary workforce; those people go first. And we saw a drop in those jobs in this report today.

FRAZIER: And you see that there are some sectors of the economy which are actually strong, actually adding workers?

CHALLENGER: Well, there are some areas that are going to buoy this economy up as we move into 2001 and keep it from getting, you know, too far down the pike. That includes energy, both in oil and gas in the old economy; electrical power that powers the new economy. Those industries are going to be very strong. Aerospace, defense, health care, food, mortgage banking: all of those are job creators.

FRAZIER: And would you describe this number as one of those leading economic indicators that gives us a sense of where we're heading, or does it tell us where we've been?

CHALLENGER: Well, it depends which number you're talking about. We track downsizing announcements. We saw, in March, over 162,000 announcements made by U.S. companies; that's the single-largest number we have seen since we began tracking those in January of '93. That is a leading indicator because companies are going about their downsizing.

Unemployment, on the other hand, tends to follow a little bit late because companies hold off letting people go, hoping things are going to turn around at the begin of a slowdown or a recession.

FRAZIER: So we'll have to talk to you again to see how all of this plays out. John Challenger, thank you for joining us this morning.

CHALLENGER: Thank you.

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