Posted on 11/08/2003 4:11:55 AM PST by Pharmboy
The longest hiring slump in more than 60 years appears to be finally ending.
Employment grew by 126,000 jobs in October, the best showing in nine months, and job growth in August and September was stronger than the government initially estimated, the Labor Department reported yesterday. It was the greatest job growth over three months since late 2000.
The unemployment rate fell slightly last month, to 6 percent from 6.1 percent in September.
"We've turned the corner," said Mickey Levy, chief economist at Banc of America Securities. "Businesses are finally shedding some of their cautiousness."
Restaurants, real estate companies, doctor's offices and other parts of the giant service sector added to their payrolls. The number of people working part time because they could not find full-time work fell by 139,000, to 4.8 million. Average hourly wages rose by just a single cent, but an increase in hours, as businesses worked harder to keep up with rising demand, fattened weekly paychecks.
Still, the recent job gains remain modest by many measures. They are not large enough to keep up with the growth of the labor force over the long term and are far smaller than the average gain over the last 50 years when the economy was growing as rapidly as it has been recently.
For both the economy and the 2004 presidential campaign, a central question becomes whether hiring will continue to accelerate even as the recent stimulus from tax cuts and low interest rates fades.
The report offered obvious political benefits for the White House, which has credited the three tax cuts passed since 2001 with softening the economic slump and predicted that they would eventually lead to job growth.
"We're delighted," said N. Gregory Mankiw, the chairman of President Bush's Council of Economic Advisers. "I think we'll see robust job growth going forward."
Mr. Bush, speaking in Winston-Salem, N.C., said, "This administration has laid the foundation for greater prosperity and more jobs across America." He added that he would not rest "until everybody who wants to work can find a job."
The recent job gains have already complicated life for Democrats, who have made the severe job losses a centerpiece of their political message. On the campaign trail yesterday, however, they continued to attack Mr. Bush's record on the economy.
Representative Pete Stark of California, the ranking Democrat on the Joint Economic Committee of Congress, noted that the current pace of job growth would need to continue for 19 months for the country to return to the peak employment level reached in early 2001.
The stock market changed little after the report's release, and the Standard & Poor's 500-stock index closed at 1,053.21, down 0.5 percent. But the interest rate on 10-year Treasury notes rose to the highest level since September, suggesting that investors were more confident that economic growth would remain healthy.
The job increases represent clear progress after two and a half years of layoffs and weak hiring that have sliced the nation's payrolls by more than 2.5 million jobs, the biggest decline since the early 1980's.
Most forecasters say that interest rates that are still low and the large tax refunds that many families can expect next spring will help keep household spending strong through early next year. By then, the economy will have enough momentum — in the form of rising employment and business investment — to grow at a healthy pace without the help of government stimulus, the economists say.
In the three months ended Sept. 30, the economy expanded 7.2 percent, the fastest rate since 1984.
"The fundamentals of the economy are lined up pretty darn well," John W. Snow, the Treasury secretary, said in a phone interview. "This recovery is beginning to take hold."
A smaller group of economists remain concerned, however, that the same forces that prevented job growth in 2002 and early 2003, despite the economy's expansion, will continue to mute hiring next year. They point out that even many service-sector companies are moving jobs to countries with lower wages and that the steps business have taken to become more efficient allow them to make more goods with fewer workers.
"We've really boosted growth with a Herculean stimulus effort," said Lakshman R. Achuthan, managing director of the Economic Cycle Research Institute in New York, referring to interest rate reductions by the Federal Reserve and the tax cuts. "And we have only 100,000-plus jobs."
The economy must add about 150,000 jobs or more each month to keep up with population growth and bring down the jobless rate over a long period of time. In the 1990's, the economy created an average of 181,000 jobs a month.
In a recent survey, only 12 percent of chief executives of large companies said that they planned to increase employment in the last three months of this year, according to the Business Roundtable, a lobbying group made up of the executives. Thirty-six percent said they would reduce their work forces.
If the job gains do continue, they will increase the odds that the Fed will raise its benchmark short-term interest rate during the first half of next year. Since June, the Fed has kept the federal funds rate on overnight loans between banks at its lowest level since 1958 in an effort to jump-start the economy.
Low interest rates have led to a surge in mortgage refinancing, giving many families more cash to spend, and also decreased the cost of many other types of loans.
The job market also began showing signs of life late last year, when employment grew during four consecutive months, only to deteriorate early this year. But the 2002 increase — 205,000 new jobs in four months — was not as large as the 286,000 gain in the last three months.
In October, the service sector, construction industry, and state and local governments all added to their payrolls.
Kohl's, the department store chain, opened 48 stores last month as part of its continued expansion and since August has hired about 140 workers, on average, at each store, a company spokeswoman said. Since July, Microsoft has hired about 1,300 workers, many of whom will work on software for cellphones and other machines that are not computers.
These increases and others outweighed job cuts at federal agencies and manufacturers. Still struggling against foreign competition, manufacturers cut jobs for the 39th consecutive month, but the loss was the smallest since the early months of the streak.
The recent upturn in jobs has helped college graduates, who have suffered over the last two years more than they typically do during a downturn. But the jobless rates for workers with only a high school education and for blacks increased, while the rates fell for whites, Latinos and college graduates.
The labor market recovery "is still in its early stages and still somewhat fragile," Drew Matus, an economist at Lehman Brothers, wrote in a note to clients yesterday. "This is at most the beginning of the end, not the end itself."
I know this was posted as a similar CNS story, but as a page one NY Times story I thought it was significant. Do with it what you will, oh Admin Mod.
Is this true? Liberals have a way of completely forgetting the Carter economy. I don't have the statistics, but it seems to me that unemployment was a lot higher, and the economy in the crapper a lot longer under the Nixon-Carter years. (But they really got terrible under Carter).
I tried to find comparable stats, but it's too early and I haven't had my coffee yet, so I was unsuccessful.
... Employment grew by 126,000 jobs in October, the best showing in nine months, and job growth in August and September was stronger than the government initially estimated, the Labor Department reported yesterday. It was the greatest job growth over three months since late 2000 ...Best job creation in three years? With no onerous and insane tariffs? How is that possible?! Sille Bean, call your office!
Does "service sector" jobs mean that former engineers, high-paid factory workers, and programmers now have jobs working at checkout counters to survive, or does it mean servicing technology with their expertise?
How many of these jobs went to non-citizens?
Rates are always finageled, "seasonal adjustments" and all of that. What does the raw data as far as unemployment statistics look like?
It seems that there is one category out there that's having a particularly tough time of it. That would be people toward the end of their careers who lost good, lifetime jobs in manufacturing, engineering, and other good-paying fields. Many have mortgaged their houses for supplemental income and have come to the end of unemployment benefits. Many don't have pensions or medical insurance to tide them over until Social Security and Medicaid kick in. This is the group that in many cases have lost their jobs, through no fault of their own. Are they beginning to find appropriate employment again?
Other questions would be "How many jobs went overseas last month, never to return?" and "how much of this increase is caused by the continuing war in Iraq?"
Every article on the economy repeats this Dem talking point: "millions" of jobs lost under Bush. The truth is, depending on what kind of spin you are going for, you can find data to support anything from a loss of 3 million jobs to a gain of 2.4 million jobs under Bush.
The government has more than one way of measuring employment. The methods of collecting and classifying the data change over time, so comparisons between current and historical numbers are not necessarily accurate. The two main employment surveys are the CES (Current Employment Statistics) and the CPS (Current Population Survey). The CES is a survey of businesses, and the CPS is a survey of households. Here are some data series and the change in employment they indicate from Jan. 2001 to Oct. 2003:
CES - Total private employment, seasonally adjusted: loss of 2,956,000
CES - Total nonfarm employment, seasonally adjusted: loss of 2,304,000
CES - Total nonfarm employment, not seasonally adjusted: gain of 638,000
CPS - Employment level, seasonally adjusted: gain of 168,000
CPS - Employment level, not seasonally adjusted: gain of 2,438,000
When you look at total employment since July, we've gained 536,000 new jobs.
Boy, NYT editors must have mulled long and hard over how to inset that garbage. Translation:
1) If illegal immigrants were allowed to work these jobs, they’d be more than filled, and
2) The economy’s growing ever faster than this lagging indicator.
Don’t bother Willie. He’s working overtime, scanning local papers on the net, trying to find a factory closing somewhere.
That is. First of all, any change creates work while it is being implemented. Then, I would think they get free instruction in using the new system. They know the company is investing in them. One would suspect you could find employees in the category that's been most severely impacted (older tech workers and engineers who've lost long-standing jobs) who would be thrilled to learn a new system.
But I know what you mean. As a substitute teacher, I constantly have to put up with complaining teachers who make $50,000+ a year after not too long on the job, summers off, showing up for work in jeans, school's out before 2PM complaining about a truly silly situation where they can't use the copier on their own. So, why can't they get a sense of perspective, get a cheap copier, and not deal with the silliness? It goes on....
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