Jobless rate slips, payrolls still weak
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| Fri, 01-09-2004 - 12:10pm |
WASHINGTON - The nation’s unemployment rate dropped to 5.7 percent in December to the lowest level in 14 months, but employers finished the year without many help wanted signs for the holidays, adding just 1,000 new jobs.
The 0.2 percentage point drop in the jobless rate occurred only because fewer people were looking for work, the Labor Department said Friday. More than 300,000 people gave up their search for jobs and dropped out of the pool of available workers.
Weak holiday hiring by retailers was to blame for holding back job gains. Analysts were expecting companies to add 100,000 to 150,000 jobs to their payrolls last month. But the net gain was just 1,000 jobs.
Employment in the nation’s stores, malls and even gas stations dropped by 38,000, the report said, and manufacturing continued a 41-month slide by losing 26,000 jobs.
The nation’s factories have been on life support, and the sector shed about a half million jobs in 2003.
The economy has lost about 2.3 million jobs since President Bush took office, a statistic that Democrats hope to use against the Bush as he seeks re-election. The Bush administration contends that stronger economic growth — helped by the president’s three tax cuts — will eventually lead to more meaningful job creation on a sustained basis.
For that sustained growth, analysts are looking for monthly payroll gains of 200,000 to 300,000 — a mark the economy is far from reaching. December marked the fifth consecutive month of payroll gains, however slight.
Other areas of the economy are surging, but the jobs market has been a weak link in the recovery. To remain competitive in the global economy and out of concern that economic improvements wouldn’t last, companies have been hesitant to take on added costs of hiring new full-time workers. Instead, they have been working their employees longer and harder. Hence, the productivity of American workers has been at high levels in recent months.
The painfully slow employment growth has been making life difficult for job seekers.
Friday’s report showed that employers have added just 277,000 new jobs since July, cutting earlier estimates of growth in October and November.
Some areas of the economy added jobs last month. Employment continued to rise in the services sector in temporary employment services, education and health care. Construction companies also added to their payrolls.
But the cuts outweighed any gains. Besides, retailers, the federal and state governments reduced their payrolls, as did banks and mortgage companies, reflecting the uptick in mortgage interest rates.
cl-nwtreehugger
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obsolete because of technology. Consider the following link:
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2004/01/08/MNGDI45PV01.DTL
Tech bosses defend overseas hiring
Intel, HP chiefs warn that U.S. needs to improve education system
Washington -- Two leading Silicon Valley chief executives, reacting Wednesday to criticism they've shipped too many high-tech jobs overseas, defended hiring workers in India and China and warned that the United States and particularly California were in danger of losing their competitive edge to the Far East.
"There is no job that is America's God-given right anymore," said Carly Fiorina, chairman of Palo Alto information technology giant Hewlett Packard.
The comments came as part of the tech industry's counteroffensive against intensifying criticism about the export of high-tech jobs.
Fiorina warned against the growing protectionist backlash, saying the only alternative to losing jobs overseas was to make a national decision to stay ahead of foreign competitors by improving grade-school education, doubling federal spending on basic research and forming a national broadband policy, as Japan and Korea have done.
Craig Barrett, head of Santa Clara chipmaker Intel Corp., declared that the world had arrived at a rare "strategic inflection point" where nearly half its population -- living in China, India and Russia -- had been integrated into the global market economy, many of them highly educated workers "who can do just about any job in the world."
"We're talking about 3 billion people," Barrett said, more than 10 times the U.S. population. "The U.S. has a very simple choice to make. We have to decide if we're going to be competitive with these markets."
The two executives were representing the Computer Systems Policy Project, a group of eight chief executives from the nation's biggest information technology companies. The group issued a report Wednesday that raised an alarm in Washington about U.S. high-tech competitiveness but offered an alternative to protectionism. All these companies earn a large share of their revenues abroad and fear trade restrictions.
At the same time, high-tech executives find themselves increasingly on the defensive as they shift operations abroad. IBM Corp., a member of the group, recently announced it would move nearly 5,000 highly paid programming jobs overseas.
The exodus of high-tech jobs to India, China and elsewhere has generated rising dismay in both parties in Congress and spawned a welter of calls for retaliation, including from several Democratic presidential candidates, though no legislation has yet gained ground.
Front-runner Howard Dean declared in a debate recently that the country needed a leader who "doesn't think that big corporations who get tax cuts ought to be able to move their headquarters to Bermuda and their jobs offshore. "
High-tech executives insist that they must use overseas workers to remain competitive.
Fiorina and Barrett said their companies had been operating in India and China since the 1970s. Companies that sell two-thirds of their products overseas cannot be expected to hire all U.S. workers, they insisted, adding that their success overseas allows them to add more highly skilled "systems- level" jobs in the United States.
But these require highly educated workers, they stressed.
"It has been assumed that we basically have a padlock on high-tech jobs," Barrett said. "That's no longer the case with the enlargement of the world's workforce and the inclusion of many, many highly educated people around the world."
The Intel chief staunchly defended overseas hiring. "We'll put people next to our customers," he said. "We'll make best use of the resources around the world."
Barrett insisted that Intel was "still making massive investments in the U.S.," but he noted that jobs at these new facilities require two years of college "just to walk in the door. The infrastructure and education requirements of those jobs is forever increasing."
Fiorina warned the United States risked losing its lead in high-end products as well.
"It's interesting to me that so many people talk about China or India or Russia as being a source of low-cost labor," Fiorina said. "Truthfully, over the long term, the greater threat is the source of well-educated labor. And if you look at the number of college-educated students that China graduates every year, it's close to 40 million. The law of large numbers is fairly compelling."
Fiorina and Barrett said the United States must make a strategic choice to increase its competitiveness before it wakes up one day and finds it's too late.
They outlined a list of objectives, including a doubling of federal spending on basic research in U.S. universities. Barrett derided Washington's decision to spend as much as $40 billion a year on farm subsidies and just $5 billion on basic research in the physical sciences.
"I have a real degree of difficulty with the fact that we are spending some five to eight times as much on the industry of the 19th century than we are on the industry of the 21st century," Barrett said.
The executives also urged a national broadband policy to allow more homes and businesses to quickly take advantage of high-speed data networks, much as Japan and Korea have done.
They also called for dramatic improvements in K-12 education in the United States, saying schools act more to block budding math and science students than to foster them.
They insisted that protectionism would fail, comparing the current situation to the competitive threat from Japan in the 1980s, when U.S. corporations underwent a painful restructuring that ultimately propelled them forward, while Germany and France resorted to protection and fell behind.
"Short-term, protectionism always looks better and feels better," Fiorina said, but it ultimately fails.
Barrett also blasted California as the "least competitive business environment in the U.S. today."
The state is losing businesses to other states that are more welcoming, in much the same way the United States is losing out overseas, he said.
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Exactly...many of those jobs going offshore aren't tech jobs.
There are things that need to change here in the U.S., but when the only deciding factor is the bottom dollar...
cl-nwtreehugger
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Community Leader
That only addresses a part of the problem of lack of jobs.
OR... Do you expect President Bush to "create" a bunch more GOVT. jobs just so everyone can work?
***Actually, many economists say an unemployment rate of 6 or 7% is actually healthy for a strong economy!
I never even insinuated that he had to 'create' those jobs...and no, I'm not suggesting creating more government jobs either.
Intro: LOU DOBBS, CNN ANCHOR: Tonight: a shocking employment report, virtually no new net jobs created in this economy last month, corporate America enjoying rising profits, while unemployed Americans struggle to find work and pay their bills.
In "Exporting America" tonight, not only does this country have a half-trillion dollar trade deficit with the world; Americans don't even own the ships that bring those products to our shores.
This interview starts about 1/3 of the way down the page.
http://www.cnn.com/TRANSCRIPTS/0401/09/ldt.00.html
Job Creation Stalls; Interview With Commerce Secretary Don Evans
DOBBS: Our top story tonight, the unemployment rate declining to 5.7 percent for the month of December. It did so, however, because 300,000 people simply quit looking for jobs. Employers added only 1,000 new net jobs to payrolls last month.
My guest tonight is the president's point man on the economy and joins us tonight from Washington, D.C.
Commerce Secretary Don Evans, good to have you with us.
DON EVANS, COMMERCE SECRETARY: Thank you, Lou. Good to be with you, as always.
DOBBS: You had to be disappointed, perhaps even shocked, as many of us were, to see that pathetic job creation.
EVANS: Well, Lou, I wouldn't say shocked, because you can't put a lot of stock in any one data point.
I've been encouraged to see unemployment drop from 6.4 percent to 5.7 percent. We created over 250,000 jobs in the last five months of 2003. The economy is very strong. As you know, growth in the third quarter was 8.2 percent. The manufacturing index numbers have been very strong for the last six months. Housing starts are at record levels. Homeownership is at record levels. Construction spending is up.
So there's every reason to believe that this economy is very strong right now, will remain very strong. We expect job creation to pick up in the coming months. And so I expect those numbers of job creation month to month to certainly improve.
DOBBS: And, obviously, we all want to see them improve right along with you. And, certainly, we are hoping that this is a recovery in which job creation will take hold.
However, this report, the Labor Department revised even lower the numbers for job creation in November, 51,000 jobs, as a result, in two months.
EVANS: Right.
DOBBS: We need 150,000 just to keep pace with our population growth.
Let me ask you -- and I know this is a difficult question, but it's a critically important question, as you know, to working Americans. When are those jobs, in your best judgment and the best judgment of the economists and the people you have working for you, going start kicking in? When will there be that job creation?
EVANS: Well, Lou, the private economists out there in the world today all indicate that they expect job creation in the year 2004 somewhere north of 1.5 million jobs. Now, that's what the private economists are saying.
We don't have any forecast ourselves within the Bush administration. But the blue-chip economists are believing that we'll start seeing job creation in the months ahead. I would say that I believe that is well, because as this economy continues to grow at the 4 percent or better level, it only is natural that jobs will begin to be created and we'll see the unemployment number, I believe, could come down even further.
DOBBS: Mr. Secretary, I can remember being with President Bush and Commerce Secretary Robert Mosbacher in January of 1992, with Mr. Bush saying on the tarmac of Andrews Air Force Base, as he was about to begin his tour of Asia, that his priority was jobs, jobs jobs.
We didn't see job creation that year and the strength that would be helpful to a president. How concerned are you about the issue of job creation? How important is it, in your judgment, to the president's reelection chances?
EVANS: Well, Lou, I just have to tell you that I wake up every morning thinking about what it is we can do to improve the creation -- improve the conditions for job creation. That's central to the American dream. It's central to our economy.
And so we will continue to take steps, we think, that will improve those conditions, including making the president's tax cuts permanent, including doing things like encouraging Congress to pass an energy bill, encouraging Congress to take action to reduce health care costs and to reduce the lawsuit burden on our businesses all across America. It's something that we work on, Lou, every day. It's not something that you work on and you forget about it.
So, all I can say is, we're going to show up every day doing everything we can to make sure that every American that wants a job has a job.
DOBBS: Is it, Mr. Secretary, ever tempting to you to be as, perhaps, if I may say this just straightforwardly, short-range in your view as much of corporate America apparently is, and look at what is going to happen over the next 10 months, 12 months?
We're looking at outsourcing. Hundreds of thousands of jobs are being shipped out of this country for no other reason that the simple fact that the corporations in this country have founds cheap labor markets in which to place jobs, rather than preserve jobs here. How important is that to your thinking? What are your plans to deal with the issue?
EVANS: Well, Lou, look, I think the global economy is becoming more integrated, more interlinked, more networked than anybody thought imaginable even five or 10 years ago.
But I really think it is all about free trade and open trade and fair trade. And I think that's healthy in the long run for the American economy and the American workers. I think the more we work to open up trade all around the world, open up markets for our good products and our good workers around the world, it means that our economy will be stronger.
And so I'm not concerned about the level of job outsourcing that I hear about. You know, we always -- remember, this is a very dynamic economy. It's an economy that creates some one million new jobs every week. And so -- and it will continue to be a very dynamic economy. As I have said on this show before, I think people around the world marvel at our ability to create jobs in America. And I expect that to continue. Free and open and fair trade is a very important part of that.
DOBBS: Do you think they also marvel, Mr. Secretary, that this economy, the strongest and largest in the world, has now run up a half-trillion dollar trade deficit, talking about not only this administration, but the previous Democratic administration, talking about free trade? Do you think they marvel that this economy has to sustain that kind of burden?
EVANS: Well, Lou, listen, trade deficits, trade surpluses go through cycles. Right now, we happen to be at a relatively high end of the cycle.
I would expect, in the years ahead, that the cycle will show that trade deficit will begin to decline. I don't know if that's the next year or two years, exactly when it is. But I would say this, Lou, that I think the financial markets and the capital markets are certainly endorsing the president's leadership on the economy, his growth leadership on the economy.
The stock market, as you know, added some three trillion in value since the beginning of 2003. The Nasdaq was up 50 percent in 2003. And when you look at the financial and capital markets, are they endorsing the president's leadership on the economy? I think the answer is yes.
DOBBS: Mr. Secretary, we thank you very much for being with us and we look forward to talking with you soon.
EVANS: Thank you, Lou. Good to be with you.
DOBBS: That brings us to the subject of tonight's poll. The question is: Are you better off today than you were three years ago, yes or no? Cast your vote at CNN.com/Lou. We'll have the results for you later.
cl-Libraone
"Our top story tonight, the unemployment rate declining to 5.7 percent for the month of December. It did so, however, because 300,000 people simply quit looking for jobs. Employers added only 1,000 new net jobs to payrolls last month. "
But Dobbs is a fiscal conservative, and it looks like the Bush admin. really is starting to alienate them with head-in-the sand fiscal policy. Sec. Evans proceeds in his talking points as though he didn't even hear the intro (maybe he didn't) "I've been encouraged to see unemployment drop from 6.4 percent to 5.7 percent." He refuses to distinguish between the economy creating generic "jobs" and the economy creating jobs for Americans. He even says that he thinks the trade deficit will pretty much fix itself :
"Well, Lou, listen, trade deficits, trade surpluses go through cycles. Right now, we happen to be at a relatively high end of the cycle. I would expect, in the years ahead, that the cycle will show that trade deficit will begin to decline."
There are powerful new global forces that might change that cycle, but Evans won't address them. And although he doesn't think the trade deficit is a problem, the IMF has recently warned that it poses "significant risks" to the world economy (but maybe the world won't notice we're stalling growth because they're "marveling at our job creation" as Evans claims.)
IMF Report Says U.S. Deficits Threaten World Economy
http://www.nytimes.com/2004/01/07/politics/07CND-FUND.html?hp
Great minds............. I was just going to post the same link.
The interview was similar to past Bush interviews.... answers are set, any deviation is met with something off topic or in Bush's case silence.
Dobbs has done some
Does anyone approve of ANYTHING President Bush has done, besides me???
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