- The Washington Times - Saturday, September 6, 2003

While it lasted, the two-week spree of encouraging monthly and quarterly economic news was a great ride. Then, on Friday, the Labor Department tossed its monthly unemployment stink bomb into the middle of the party, which was just beginning to get exciting.

The spree began when the Conference Board reported the fourth consecutive monthly increase in its Index of Leading Economic Indicators. That was followed by the report of an upwardly revised 3-percent-plus growth rate for the second quarter. Other good news included: July increases in construction spending, factory orders and durable goods; a big jump in August sales at Wal-Mart; robust reports from the Institution of Supply Management for August activity in both the manufacturing and non-manufacturing business sectors; a phenomenal productivity growth rate of 6.8 percent for the second quarter; and an upbeat report in the Fed’s latest Beige Book, which covered July and August.

Then, the Labor Department weighed in Friday with yet another dismal report on the labor market. For the seventh month in a row, the economy continued to shed jobs. Contrary to expectations of a small improvement in employment ranging from 15,000 to 25,000 jobs, nonfarm employment plummeted by 93,000 jobs last month. As expected, manufacturing employment fell for the 37th consecutive month. Especially disturbing, because it was unexpected, was the loss of 67,000 jobs in the service-producing sector.

The economy has now lost 2.8 million jobs since employment peaked in March 2001, when the economy officially fell into recession. (The private sector has lost more than 3.3 million jobs.) Compared to the jobless recovery that haunted the previous Bush administration, the current Bush White House has been confronting a job-loss recovery. More than 1.1 million jobs have been lost since the economy emerged from recession 21 months ago in November 2001. By the 21st month following the March 1991 end of the previous recession, 900,000 jobs had been created.

The manufacturing industry has borne the brunt of the job losses; and the industry’s production workers have been hit especially hard. The numbers are startling. Since manufacturing and production jobs began falling 37 months ago, manufacturing has lost 2.73 million jobs, of which 2.26 million have been production workers.

The economy has entered new territory. Since employment of production workers climbed above 12 million in July 1983 following the 1981-82 recession, production employment remained relatively stable for nearly 18 years. It never reached 13 million and never fell below 12 million, even during the 1990-91 recession and its jobless aftermath.

Then, the bottom fell out. Today, there are 10.22 million production workers, the lowest number since April 1941. Never in the 62 subsequent years has production-worker employment fallen below 10 million. But that potentially politically combustible milestone is now well within reach, given the likelihood that the downward trend in production employment will not be reversed anytime soon. Should production jobs continue to fall by the monthly average of 61,000 jobs that has prevailed during the 37-month downturn, production employment will fall below 10 million in December, just as the 2004 presidential campaign begins to heat up.

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