- The Washington Times - Friday, December 5, 2003

ASSOCIATED PRESS

The economy’s four-month hiring spree slowed in November, raising new questions about revival in the jobs market even as the unemployment rate edged down to 5.9 percent.

The Labor Department’s report yesterday “is like getting just the Christmas present you wanted, but two sizes too small.” said Bill Cheney, chief economist at John Hancock Financial Services Inc.

U.S. companies added 57,000 new jobs last month to boost payrolls by 328,000 in the past four months. But the showing disappointed analysts, who expected November’s job growth to surge by 150,000 after recent data showed the economy was gaining strength.

The disappointing job growth sent stocks sliding. The Dow Jones Industrial Average fell 68 points, or 0.7 percent, to 9,863, wiping out Thursday’s 57-point gain. Broader stock indicators also fell, led by the technology group. The Standard & Poor’s 500 index was down eight points to 1,0612, and the Nasdaq Composite Index fell 31 to 1,938.

The jobless rate fell last month from 6 percent in October to an eight-month low of 5.9 percent. Economists had predicted the rate would hold at 6 percent.

Democrats have been hoping to use a dismal jobs outlook to reclaim the White House next year. But improvements, however slight, could benefit President Bush.

Americans are growing more optimistic about the economy, and that shift is beginning to improve Mr. Bush’s standing with voters, according to an Associated Press poll.

“We’ve overcome a lot. We have a strong country, a strong economy,” Mr. Bush told small-business owners and employees at a Home Depot store in Halethorpe, Md.

“More workers are going to work,” he said yesterday, noting the job growth over the past few months and the decline in the overall unemployment rate.

As for next year, Labor Secretary Elaine L. Chao was optimistic. “Many other economic indicators point toward continued job growth well into the new year,” she said in a statement.

Weekly claims for unemployment insurance have fallen since April, and economic growth and productivity in the third-quarter reached 20-year highs.

But for sustained job growth, economists are looking for monthly payroll gains of 200,000 to 300,000 to significantly lower the unemployment rate.

The jobs market “is not improving as fast as we thought it was,” said David Wyss, chief economist at Standard and Poor’s DRI. “It’s true we’ve had four consecutive months of payroll growth, which is a start. But it’s only a bare start.”

Holding down overall payrolls last month were the grocery store strikes in California, Missouri and elsewhere, the Labor Department said. As many as 30,800 jobs were lost because workers were on strike or locked out, or, as in St. Louis, replacement workers were no longer needed because the dispute was resolved.

Long-term unemployment in November surpassed a 20-year high. Nearly 24 percent of the jobless, or 2 million people, have been out of work for more than six months, the highest percentage since July 1983.

Democrats want to extend long-term unemployment benefits a third time before Congress adjourns next week, but they aren’t likely to succeed. The program expires mid-month and, starting Dec. 21, about 90,000 people a week will not have access to extra benefits.

“Somehow we can afford tax breaks for millionaires and a war in Iraq, but we can’t afford to help the unemployed. It’s a disgrace,” said Rep. Charles B. Rangel, New York Democrat.

The nation’s factories continue to struggle. Job losses continued for the 40th consecutive month in November, with payrolls falling by 17,000. But the pace has slowed significantly.

In a sign of possibly better days ahead for manufacturing, the Commerce Department said yesterday that new orders to U.S. factories rose by 2.2 percent in October, the strongest increase in 15 months. The gain, the fifth increase in the past six months, was led by strong demand for military hardware and transportation equipment.

The jobs market has been a weak link in the recovery, with companies hesitant to hire new full-time workers out of concern that the improvements wouldn’t last. Instead, employers have been working their employees longer and harder.

The services sector continued to lead employment gains, with health care and social services jumping by 25,000 in November. Hotels and lodging facilities created 13,000 new positions. Hiring also occurred in education, government and professional and business services.

In the goods-producing category, construction employment was up last month by 10,000.

Economists think the Federal Reserve will hold a key short-term interest rate at a 45-year low of 1 percent at its next meeting Tuesday.


Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide