New job growth still weak
| • | Teen employment down to 37-year low this summer |
By Brian Tumulty
Gannett News Service
WASHINGTON — Labor Day 2002 arrives in the United States with 1.8 million fewer jobs than the nation had in December 2000, when employment peaked at 135.9 million jobs.
Despite last year's recession, most experts see economic growth and new jobs in the future. But how fast the growth will be and how many jobs are likely to be created is a big question mark — especially for the nation's 8.3 million unemployed.
The number of new jobs created averaged less than 100,000 a month from January through July, according to the Bureau of Labor Statistics. At that pace it will take until early 2004 for employment to return to the December 2000 level.
Another measurement tool — payroll employment figures that exclude the self-employed — shows even weaker job growth. There was a net increase of only 94,000 new payroll jobs from May through July, or a rate of only 31,300 new jobs a month.
This weak job growth is generating talk among experts about another so-called "jobless recovery" similar to 1992 when employers favored investing in new business equipment, implementing productivity improvements and demanding more hours from current workers instead of hiring new employees.
"It's clear that payroll employment growth is not yet vigorous," said Glenn Hubbard, chairman of the White House Council of Economic Advisers. "That's not unusual in recoveries. ... I wish payroll employment growth was much more vigorous, and it is a key worry."
Many economists think the recession that began in March 2001 probably ended somewhere between November and January.
The economy showed a spurt of growth in the first three months of 2002. But the growth rate slowed to about 1.1 percent in the second quarter.
Hubbard said doubts among business executives about the strength of the recovery have put a lid on hiring. "I think the question for payroll employment is when employers believe the upturn is here to stay," he said. "That's when they are ready to pull the trigger on hiring workers. And I think there's some skepticism in some business people's minds."
On the positive side, the 2001 recession was not as harsh as the previous recession in 1990-1991. Unemployment, which generally reaches its peak at the end of a recession or a few months after, peaked in June 1992 when jobless rolls hit 10 million and the unemployment was 7.8 percent.
So far this year, April has been the worst month for unemployment, when the jobless rate reached 6 percent and 8.6 million Americans were listed as looking for work but unable to find a job.
Still, many industries are suffering.
Despite the boom in home sales attributed to low mortgage rates, the construction industry has lost 256,000 jobs since March 2001.
The financially troubled airline industry has shed 136,000 jobs since January 2001, with the rate of layoffs higher in the wake of the Sept. 11 terrorist attacks and the recent Chapter 11 bankruptcy filing by US Airways.
Also off from their employment peaks are restaurants, which have downsized by 180,000 cooks, waitresses and other employees since July 2001; personnel and temp agencies, which have 774,000 fewer workers on call than they did in September 2000; and hotels, which employ 121,000 fewer workers than in December 2000.
The manufacturing sector has been particularly hard hit by the latest recession, losing 2.1 million jobs since the industry's most recent peak in April 1998. The steel industry has dozens of companies in bankruptcy. Industrial equipment manufacturers have laid off about 18 percent of their total workforce because of the drop in new investments in plants and equipment. Electronics manufacturers have cut 19 percent of their jobs. The long-term decline in textile and garment manufacturing has accelerated.
AFL-CIO President John Sweeney contends the manufacturing sector, which continued to shed 7,000 jobs in July, remains locked in a recession. This opinion is reinforced by David Huether, chief economist for the National Association of Manufacturers, an employer group, who notes: "In the manufacturing sector we're basically at the bottom."
