57,000-job gain in November disappoints

Analysts had expected an increase of 150,000

Stocks weaken in response

Unemployment rate does dip to 5.9%, however

December 06, 2003|By Jamie Smith Hopkins | Jamie Smith Hopkins,SUN STAFF

U.S. employment appeared to grow at a disappointingly slow rate last month, a setback after weeks of encouraging economic news - and a signal that the only market the average American cares about is still in the doldrums two years after the recession officially ended.

Employers added 57,000 jobs in November, compared with 137,000 the month before, according to Labor Department numbers released yesterday. Analysts had expected an increase of 150,000 jobs, especially since retailers generally ramp up for holiday sales this time of year. But the retail sector actually posted job losses.

Though the unemployment rate slipped to 5.9 percent from 6 percent, the lowest it's been since March, Wall Street reacted to the unmet expectations. The Dow Jones industrial average was down 68.14 points; the Standard & Poor's 500 index lost 8.22 points; and the Nasdaq index tumbled 30.98 points.

"This month's report was totally lackluster relative to what we should be seeing," said Heather Boushey, an economist with the Center for Economic & Policy Research in Washington. "It's nothing compared to job gains we saw during past recoveries. ... It really just doesn't look that good for the American worker right now."

The job growth lagged behind employment gains posted in September and October, frustrating experts who had hoped to see the labor market energized after an impressive economic surge in the third quarter. Boushey said the one-two punch of tax refunds and mortgage refinancing over the summer doesn't appear to be enough "to get us over the hump to long-term sustained growth."

But Irving Leveson, president of ForecastCenter.com, a New Jersey research and consulting firm, thinks the employment situation may be improving faster than it appears.

The statistic showing 57,000 additional jobs comes from the Labor Department's survey of businesses and government agencies, generally considered a more reliable figure than the employment numbers culled from the concurrently released survey of households. But the household survey is particularly useful at a time of sharp change, Leveson said - and it shows that 589,000 more people were employed last month.

"It's consistent with a lot of other good news on the economy," he said. "We've got a long way to go but we're decisively heading in the right direction."

Job gains were spread across nearly all sectors last month, according to the Labor Department. Even manufacturing lost fewer jobs, 17,000 compared with an average monthly drop of 53,000 from summer 2002 to last summer.

The big loser was retail, which shed 28,000 jobs. But 23,000 of those people were striking Southern California grocery workers, who were counted as unemployed because they weren't receiving paychecks.

Education and health services saw the biggest jump, with employment up by 34,000. Construction added 10,000 jobs.

Leisure and hospitality - which lost 27,000 jobs between August and October - gained 13,000 jobs last month. Part of that increase came from the shaky air transportation sector, which added 3,000 jobs.

"The recovery is touching more industries, more companies," said Robert B. MacIntosh, chief economist for Eaton Vance Management, a Boston financial services firm.

Also last month, the civilian labor force grew by 484,000, while the number of discouraged job-seekers - people who have dropped out of the labor pool in despair - remained relatively steady at 457,000.

About 2 million of the unemployed had been trying to find work for at least 27 weeks, about the same as in October. They accounted for nearly a quarter of jobless Americans.

Maryland, one of the best performing labor markets in the nation, posted an unemployment rate of 4.1 percent in October compared with 4.2 percent the month before, according to the Labor Department. State numbers trail the national numbers by a month.

Cyndy Fields, Adecco Employment Services' regional vice president for the Baltimore-Washington area, said she's seen slight increases in temporary hiring over the past year, generally an indicator of job creation to come.

Right now, they're placing more people in seasonal positions like retail but also data-entry, telemarketing, customer service and other evergreen jobs. About half the positions have the potential to become permanent, she said.

Dawn McLaren, a research economist with Arizona State University's Bank One Economic Outlook Center, thinks improvement is around the corner. A consensus forecast coordinated by the university predicts that national employment will grow by nearly 2 million jobs next year - not quite as many as have been lost since January 2001, but close.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.