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Market Basket cited in US jobs report

Protest added to disappointing labor growth

After six weeks of inactivity, the Burlington Market Basket is once again serving customers -- and employing workers.Jim Davis/Globe Staff

During the six-week work stoppage at Market Basket that slowed the store’s business to a trickle, protesting employees and their supporters frequently said their actions would have a national impact.

The US Department of Labor confirmed on Friday that they did.

The Labor Department cited the Market Basket job actions, which idled hundreds of full-time workers and as many as 20,000 part-time workers as a factor in the nation’s disappointing job growth in August. The grocery store industry had 17,000 fewer jobs in August, the Labor Department said, noting “employment disruptions at a grocery store chain in New England.”

Doug Handler, chief US economist for IHS Global Insight, a Lexington forecasting firm, said the job losses are likely temporary. He said the supermarket sector is typically stable, adding 6,000 to 7,000 jobs a month nationwide.

“We do expect this to be reversed,” Handler said. “We still do believe that a significant portion of the downturn was determined by Market Basket.”

US employers added 142,000 jobs last month, the fewest since the end of last year. Most economists expected the job gains to top 200,000, as they had in each of the previous six months. The unemployment rate slipped to 6.1 percent from 6.2 percent in July.

The Labor Department estimates monthly employment levels based on a survey of 144,000 businesses, according to Mike McCall, an economist at the department. The companies interviewed for the survey are not publicly disclosed.

Any employee who was paid for at least one hour of work during the pay period that includes the 12th day of the month is counted as employed by the survey, according to the Labor Department. That was the week in August when many part-time Market Basket employees had their hours eliminated.

“The [retail] industry was impacted by an event in the New England area, and that’s where we leave it,” McCall said.

More than 1,500 Market Basket employees filed for unemployment benefits in New Hampshire in August, according to Rich Lavers, the deputy commissioner of New Hampshire Employment Security. Massachusetts officials said some applied for unemployment assistance, but declined to give a figure.

The slowdown in the labor market last month was disappointing to many economists who viewed the economy as accelerating after several years of lackluster growth.

Even the decline in the unemployment rate was tinged with disappointing news, since it stemmed mostly from people giving up job searches rather than finding jobs. The labor force lost 64,000 people from July to August.

Like the retail sector, motor vehicle manufacturing shed jobs. Vehicle makers normally lay off workers in July when they shut down to retool plants for new models, then call them back in August when production resumes. But that sector’s payrolls shrunk by 5,000 jobs in August after expanding by 13,000 in July.

There were bright spots in the jobs report. Professional and business services grew by 47,000 jobs in August, and health care employment grew by 34,000. The number of long-term unemployed continued to shrink, as those without jobs for 27 weeks or more dropped to 3 million from 3.2 million in July.

The average work week remained unchanged for a sixth straight month, at 34.5 hours. Average hourly earnings grew just 6 cents, to $24.53, showing little inflationary pressure that might induce the Federal Reserve to quickly end its stimulus programs.


Material from the Associated Press was used in this report. Jack Newsham can be reached at jack.newsham@globe.com. Follow him on Twitter @TheNewsHam.