|Your account||Today's news index||Weather||Traffic||Movies||Restaurants||Today's events|
Saturday, March 06, 2004 - Page updated at 12:25 A.M.
U.S. jobs growth still weaker than expected, report shows
By Jeannine Aversa
The frustrating news for out-of-work Americans, contained in a jobs snapshot released yesterday by the Labor Department, showed a continuation of the slow employment growth the country has been enduring.
The net gain in "nonfarm" payrolls government and private employers fell well short of the 125,000 jobs that economists had been forecasting.
The little growth there was came from the government. Private-sector employment was flat.
"This remains a jobless recovery, pure and simple," said David Rosenberg, chief economist at Merrill Lynch. "Meaningful job creation remains alarmingly elusive."
The situation is "very astonishing," said Lyle Gramley, a former Fed governor and now a senior economic adviser with Schwab Soundview Capital Markets. "Here it is, two-and-a-quarter years into the recovery, and we're still having trouble creating jobs. My confidence about when the job pickup is likely to begin is waning."
Earlier this week, the Business Roundtable, a 150-member association of chief executives, said an expected strong increase in sales at their businesses won't lead to a significant pickup in hiring this year.
Need fewer workers
Goodrich, the world's biggest maker of aircraft-landing gear, doesn't see "any real significant hiring" because the company can meet rising sales with fewer workers, Chief Executive Officer Marshall Larsen told investors Tuesday.
Chris Low, chief economist at FTN Financial, said yesterday's report was "unambiguously ugly."
Joel Naroff of Naroff Economic Advisors called it "terribly disappointing."
"The risk of an economic slowdown later this year has increased, persuading businesses to be extra cautious about hiring people," said Sung Won Sohn, chief economist at Wells Fargo.
Market reaction was swift and sharp.
The dollar weakened against most currencies and U.S. Treasury bond prices shot up, sending interest rates down sharply, on the view the Federal Reserve would hold borrowing costs steady for a long time. Stocks were mixed on expectations of steady interest rates, helping temper concern over the lack of jobs.
The report also showed that job creation in December and January was weaker than previously thought. Total payrolls in December grew by just 8,000 and were up by 97,000 in January, according to revised figures.
The overall seasonally adjusted civilian unemployment rate stayed at 5.6 percent in February as 392,000 people left the civilian work force for any number of reasons.
The health of the nation's economy, especially the job climate, is a major issue in this year's presidential race.
2.2 million jobs lost
The economy has lost 2.2 million jobs since Bush took office in January 2001.
Democratic presidential challenger John Kerry cited those figures as evidence of what he contends is Bush's poor handling of the economy.
"For over three years now ... George Bush has promised the American people that new jobs are on the way. But he's over-promised and under-delivered," Kerry said.
Those job losses "rip the heart out of our economy," Kerry said in a statements. "At this rate, the Bush administration won't create its first job for more than 10 years."
White House spokesman Scott McClellan countered: "The president's policies are working to put the economy on the road to a strong recovery. But there is more to do. "
Treasury Secretary John Snow called on Congress to make the president's tax cuts permanent as a way to spur job growth. "This administration is not satisfied with today's job-creation numbers," he said.
"The job-creation figure this morning was not satisfactory," White House chief economist Gregory Mankiw said in an interview. "Creating jobs is a very important priority for this administration."
Manufacturers cut 3,000 jobs last month, the 43rd-straight decline. About 1.7 million factory jobs have been lost since the recession ended in November 2001.
"Manufacturing has really taken it on the chin during this downturn," Mankiw said.
The weak job creation, however, comes even as the economy has been growing at a healthy rate. Productivity gains have allowed companies to produce more with fewer people, economists explained.
Some economists said the relative dearth of hiring more than 27 months into an economic recovery was unprecedented.
"We are in uncharted territory," said David Rosenberg, chief North American economist at Merrill Lynch.
"It's a very disappointing report," said Alice Rivlin, a former Federal Reserve vice chairwoman and an economist at the Brookings Institution. "I can't find any good news in it."
The unemployment rate didn't rise because people dropped out of the labor force, she said.
There were some 8.2 million people unemployed in February, with the average duration of 20.3 weeks without work. That marked the highest average duration of joblessness in more than 20 years.
John Sweeney, president of the AFL-CIO, said yesterday's report "underscores the disastrous state of our nation's jobs situation."
An average of just 42,000 jobs have been created each month in the last three months, down from the 79,000 average of the prior three months.
Economists say gains near 150,000 are needed each month just to keep pace with population and labor-force growth.
Analysts want to see the economy generate about 200,000 or 300,000 net jobs a month on a consistent basis before they declare a recovery in the fragile labor market.
Federal Reserve Chairman Alan Greenspan is optimistic that job growth, which has been poking along, will speed up.
"We could get a pop in employment at any time," Greenspan said last week.
Fed policy-makers probably won't be in a rush to boost short-term interest rates, which are currently at a 45-year low of 1 percent, until the job market picks up, economists said.
Material from Bloomberg News and Reuters is included in this report.
Copyright © 2004 The Seattle Times Company
Home delivery | Contact us | Search archive | Site map | Low-graphic
NWclassifieds | NWsource | Advertising info | The Seattle Times Company
Back to top