December job growth sluggish
By Peter G. Gosselin
Los Angeles Times
WASHINGTON — The U.S. economy managed to add only 1,000 jobs in December as employers relied on productivity gains, rather than hiring, to meet increased demand, the U.S. Labor Department said yesterday.
The unemployment rate did dip two-tenths of a point to a 14-month low of 5.7 percent, but that was because more than 300,000 people dropped out of the labor force — a sign not of economic strength but of an exodus of discouraged job-seekers.
The anemic employment report set off chatter on the presidential campaign trail, with Democrats ridiculing Bush administration policies and Republicans generally seeking to change the subject.
The president, meeting with a group of small-business women, pointed to the decline in the unemployment rate, recent productivity gains and increases in factory orders as evidence that "the economy is getting better."
Typical of the Democratic response was presidential challenger Howard Dean's: "Under Bill Clinton, nearly 1,000 jobs were created every three hours for eight years. Under George Bush, it took the entire month of December."
Some of December's poor showing might be a fluke — the product of a change in Americans' holiday buying habits that has not yet been captured by measuring methods.
But even economic optimists acknowledged that the latest employment numbers were bad news.
"No question, the December employment report was a disappointment," said Bank of America chief economist Mickey D. Levy.
It was a disappointment as well for Don Williams, who was an accountant and financial reporting specialist for Transamerica Corp. in Los Angeles for almost 30 years before being laid off in April 2002.
Williams, 53, said he has been unable to find full-time work since then, despite sending out more than 500 rŽsumŽs. He and his wife, a part-time recreation director for the Long Beach public schools, have lost their house and their health insurance.
"I don't understand it," he said. "You do all the right things you were told to do — work hard, get an education — and I can't even get a callback."
The most immediate effect of new numbers might be in Washington, D.C., where the administration and the Republican-controlled Congress will be under increased pressure to revive a federal jobless benefits program they let lapse last month.
Until it began shutting down last month, the federal program added 13 weeks of benefits to the 26 weeks available in the traditional state-federal benefits system.
Activists said renewal of the program is important because 1 in 5 unemployed workers has been without a job for more than six months. That's almost 2 million of the nation's 8.4 million jobless.
"This is the first time in 50 years that long-term joblessness has been above the 20 percent mark without workers being offered any federal jobless benefits," said Maurice Emsellem, policy director of the National Employment Law Project.
Not only did the Labor Department say the economy produced few jobs in December, but it trimmed its earlier estimates of job growth for October and November by 51,000. And it said the manufacturing sector, which many had hoped would add jobs for the first time in nearly 3 1/2 years, extended its losing streak last month by shedding an additional 26,000 workers.
Some analysts worry that unless employers begin adding jobs in substantially greater numbers, the economic recovery could sputter out.
But the report suggests another — and in some ways a more unsettling — possibility: that the recovery will proceed apace with consumption, investment and corporate profits all expanding, but without additional jobs, leaving those unlucky enough to be jobless stranded.
"We're beginning to see a decoupling of economic growth and labor market growth," said Jared Bernstein, an economist with the generally liberal Economic Policy Institute in Washington, D.C. "Let's face it, most families meet the economy in the labor market, so unless it does well they are not going to feel many of the benefits of economic growth."
