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.
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A few years ago I was shocked to learn of an airline that used inmates for
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