- The Washington Times - Sunday, December 5, 2004

For a while, it looked as if the conclusion to the 2004 election would prove a rejuvenating tonic for the nation’s economy. But then, as has happened so often over the past three years, news on the jobs front fell short of expectations.

The latest disappointment came Friday with a government report that payrolls grew by just 112,000 workers in November, far below the 200,000-job gain many economists had expected. As if that weren’t enough, the government revised significantly downward the job gains for the previous two months.

It was another bump in what has been a torturous road for America’s labor market, which some hoped would improve when the presidential election was promptly settled. Even though the economy has been out of the recession since November 2001, the country still has not recouped all the jobs lost since March 2001, the month the downturn began.

In terms of job production, this expansion so far is the worst of all time, with far fewer jobs created than during the first three years after the 1990-91 recession. During the presidential race of 1992, Bill Clinton used the charge of a “jobless recovery” to good effect to defeat President Bush’s father.

Democrats tried the same thing this year, taunting Mr. Bush with the charge that he would be the first president since Herbert Hoover to have a net loss of jobs during his first four years in office.

Mr. Bush won re-election anyway, but the Democrats’ reproach still could prove true. Mr. Bush still has a net job loss since taking office of 313,000 and just two months to make it up. Many analysts believe he will escape the Hoover label, but just barely.

Economists have a variety of explanations why job growth has been so anemic. Increased global competition and a soaring trade deficit have contributed to the loss of 2.7 million manufacturing jobs since Mr. Bush took office.

Facing such competitive pressures, U.S. businesses have searched for ways to squeeze more output from existing workers. That has sent productivity rising but has depressed job and income growth.

“We’ve seen a number of lean years for workers,” said Mark Zandi, chief economist at Economy.com. “They are still waiting for their fair share of the economic pie, and it looks like they will have to wait a little longer.”

The Bush administration, as it did during the campaign, insists that things are turning around. Since hitting rock bottom with a loss of 2.6 million jobs in August of last year, the economy has managed 15 consecutive months of job gains, totaling an increase of 2.3 million jobs through November.

But even during the latest period of job gains, the monthly increase often has proved disappointing with a strong month or two of job gains followed by a lackluster one.

When the economy created 303,000 jobs in October, a figure originally reported as a gain of 337,000 jobs, many analysts hoped that the job machine finally was kicking into higher gear.

The jump in employment was just one of several signs after the election that seemed to indicate the economy was gaining momentum as Americans were relieved that the 2004 elections did not turn into a repeat of 2000 when the country didn’t know for more than a month who had won.

That the election passed without a terror attack, and oil prices retreated from the record $55-per-barrel highs of early fall also helped provide a boost to Wall Street. The Dow Jones Industrial Average finished last week on a winning note, helped by a 162-point gain Tuesday, the third-largest one-day jump this year.

“Clearly, uncertainties have diminished. We are beginning to see some light at the end of the tunnel,” said Sung Won Sohn, chief economist at Wells Fargo in Minneapolis.

Mr. Sohn said he believed the economy would be able to create an average of 200,000 payroll jobs per month in 2005. That would compare with average monthly job creation of 185,000 this year.

Mr. Sohn and other analysts believe stronger job growth will occur as companies exhaust their ability to squeeze more work out of existing employees and begin hiring actively on a sustained basis. Still, analysts are not looking for the unemployment rate to move much.

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