Nation's jobless recovery sputters

Increase of 21,000 jobs is one-sixth the size economists predicted

8.2 million people out of work

March 06, 2004|By Jamie Smith Hopkins | Jamie Smith Hopkins,SUN STAFF

U.S. employment barely budged last month, an economic problem for the 8.2 million people out of work and a political predicament for a president who doesn't want to end up in the same situation.

About 21,000 jobs were created in February, the Labor Department said yesterday, a sixth the size of economists' forecasts. The unemployment rate remained at 5.6 percent as 392,000 people dropped out of the labor force, just as the presidential campaign kicked into high gear.

The Labor Department, which originally estimated an increase of 112,000 jobs in January, also revised that number downward, to 97,000.

Its disappointing report came on the heels of an Associated Press poll showing President Bush and Democratic challenger John Kerry running neck and neck. Fifty-three percent of those polled said they "disapprove" of the way Bush is handling the economy.

The U.S. economy has regained momentum since the 2001 recession, from the stock market to the gross domestic product, but employment is down by 2.3 million jobs since Bush took office. Gains made during each of the past six months were significantly below the level that economists say is needed just to keep up with population growth.

"The great American job machine is still sputtering," said Mark Zandi, chief economist at Economy.com in West Chester, Pa. "The job market's better than it was six months ago, but barely, and it's certainly not improving as quickly as expected. ... We need to see much better [numbers] soon or the economic expansion will measurably weaken."

Investors' reaction was muted. The Nasdaq composite index dropped 7.48 points, but the Dow Jones industrial average gained 7.55 points and the Standard & Poor's 500 index inched up 1.99 points.

The president's camp immediately put the jobs data to work for its cause, prodding Kerry's "20-year record of supporting higher taxes."

"Our nation's economic recovery should not be derailed by bad policies like over regulation, over taxation and over litigation," Terry Holt, Bush's campaign spokesman, said in a statement yesterday. "President Bush has provided steady leadership that has put us on the road to economic recovery."

Kerry, who said the president has "overpromised and underdelivered," shot back with a statement of his own: "At this rate, we won't dig ourselves out of the jobs hole George Bush has gotten us into for almost a decade."

The U.S. labor force participation rate fell to 65.9 percent last month from 66.1 percent, according to the Labor Department. About 484,000 "discouraged workers" were not looking for jobs because they believed none was available, about the same as the previous February, the department said.

Meanwhile, a new Economic Policy Institute study found that more than a fifth of unemployed Americans were out of work for six months or more last year, the worst annual rate since 1983.

Tony Morgan, 23, has been out of work for only 2 1/2 months, but he's finding this the most difficult job search of his life. It's not just the weak employment market - his car's transmission is shot, and he must find a job connected to public transportation.

The Northeast Baltimore resident, who was laid off from a retail stocking position, hopes to hear next week whether he'll get a job at a Procter & Gamble warehouse in Hunt Valley. He was one of 78 people who trekked yesterday to the city's one-stop career center on East Madison Street to hear about such openings.

Frederick Atkins, 50, of Edmondson Village has been out of work for about the same amount of time. His job moving vehicles at the General Motors plant on Broening Highway was moved to Texas. But he approves of Bush.

"The president is ... just trying to keep the economy straight," said Atkins, who's taking computer classes at the one-stop career center while he hunts for new employment.

Gains and losses in private industries last month canceled themselves out. The largest increase - 21,000 jobs - was produced by government.

The normally strong construction industry cut 24,000 jobs as weather worsened. Leisure and hospitality shed 9,000 positions.

Manufacturing lost 3,000 jobs, though that was a slower decline than normal for a sector battered by overseas competition.

Retail trades added 13,000 jobs, as did education and health services. Professional and business services rose by 10,000 jobs, buoyed by growth in the temporary-help industry.

"You have weather depressing construction jobs, but even if you factor that out, it was still far short of expectations," said Scott J. Brown, chief economist for Raymond James & Associates in St. Petersburg, Fla., who dubbed it "a big surprise."

Economists' consensus outlook called for an increase of about 125,000 jobs last month - and that was an attempt to be conservative because many hoped for much more, Brown said.

"I think it's about as bad a job market since the Great Depression," Zandi said. "It's been rotten for the better part of four years."

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