|
In an interview this week, Richard L. Trumka, president of the nation’s largest labor union, the A.F.L.-C.I.O., called on the government to unleash fresh spending on large-scale construction projects to put people back to work.
Absent that, “it will probably be 2012 before there starts to be real job creation,” said Trumka.
Yet despite the headline-grabbing unemployment number in the
government’s snapshot of the October job market, economists sifting
through the details found several reasons to take comfort.
The pace at which jobs are disappearing continued to taper off in October, the precursor to eventual growth.
Between November 2008 and April 2009 - amid the paralyzing fear that
accompanied the collapse of prominent financial institutions like Lehman Brothers - the economy shed an average of 645,000 jobs a month. Between May and
July, the pace dropped to an average monthly loss of 357,000 jobs. And
over the last three reports, average monthly job losses have slipped to
188,000, after factoring in upward revisions to the data for August and
September.
The number of temporary workers increased by 44,000 in October,
adding to gains in the previous two months - an apparent sign that
businesses have squeezed as much production as they can out of their
existing workforces and feel the need to bring in more people.
“That goes the right way,” said Dean Baker, co-director of the
Center for Economic and Policy Research in Washington. “That’s an
encouraging sign.”
The hope is that as the economy expands, companies will use fresh
profits to add to payrolls as they reach for increased sales. As
workers spend their paychecks, they will create opportunities for other
businesses, generating more jobs.
Some experts see this scenario unfolding now, asserting that the economy will add jobs by late winter.
“People are hurting, but if you can get past the sticker shock of
the unemployment rate and look at the guts of the report, they are
still very consistent with a recovery,” said Michael T. Darda, chief
economist at the research and trading firm MKM Partners. “We’re getting
very close to the peak unemployment rate.”
But some doubt whether recent trends can continue, absent another dose of government spending.
Though the economy grew at a 3.5 percent annualized rate between
July and September, much business activity was stirred up by special
programs aimed at encouraging consumers to spend, not least the
cash-for-clunkers program that provided taxpayer-financed cash
incentives to people trading in their cars.
As the effects of this and other stimulus programs fade over coming
months, fundamental weakness may reemerge, with consumers - whose
spending accounts for 70 percent of overall economic activity -
confronting enormous debt, the loss of wealth and fears about job
security.
“We just went through an unbelievable financial catastrophe in this
country and it typically takes a long time to come back,” said Joshua
Shapiro, chief United States economist at MFR, a market research firm
in New York, who envisions jobs continuing to decline until at least
the middle of next year.
Beneath the dueling interpretations of future prospects, the report
left little doubt that the present was still bleak in millions of
American households.
In Columbia, South Carolina, Raymond Vaughn is still unemployed a year and a
half after he lost his job installing and repairing windows. Back in
April, he was training for a new career in medical billing, a growing
field, through an online course he found on the Internet. But his
unemployment benefits soon ran out, eliminating his $221-a-week check,
and then he could no longer muster the $98 weekly payments for his
course.
Vaughn, 43, is back to what has become a familiar if dreary
everyday routine. He drives to the unemployment office downtown, where
the crowds seem thicker than ever. He waits his turn to sit in front of
a computer so he scan meager listings and send out fresh applications.
Then, he returns home, to his sagging couch and his television, where
cheerful news anchors tell him that the economy is looking up.
“They say it’s supposed to be better, that’s what I see on the
news,” said Vaughn. “But I sure see a lot of people down at the
unemployment office. I really don’t see how the job stuff is going to
change. I don’t see any jobs out there.”
Last month, Vaughn thought he had a job, a position at a factory
that makes flooring boards for $13 an hour. But two weeks before he was
to go in for training, the company called him to revoke the offer.
“They said they had a hiring freeze,” he said.
And so Vaughn finds himself stuck in a crowded slice of a lean
economy: another unemployed man living on the largess of a woman. His
fiancee’s wages from her secretarial job pay the bills.
The latest job report amplified the reality that the pain has fallen
particularly hard on men, who suffered a 10.7 percent unemployment rate
in October, as compared to 8.1 percent among women. Among African
American men, unemployment reached 17.1 percent in October.
Unemployment reached 9.5 percent among white Americans, 13.1 percent among Hispanics and 27.6 for teenagers.
Among all groups, the underemployment rate - a broader measure of
the jobs shortfall which includes people whose hours have been cut,
those working part-time for lack of full-time work, and those who have
given up looking - is 17.5 percent.
Health care remained a rare bright spot, adding 29,000 jobs in
October. For another month, construction and manufacturing led the
declines, losing 62,000 and 61,000 jobs respectively.
Such were the details of a report dominated by a single fact: The
official jobless rate now occupies two digits. More than a mere
statistical marker, some worried that this could perpetuate anxiety,
prompting a further hunkering down within the economy.
“It’s a benchmark,” said Baker. “It’s part of a general backdrop
of economic news that does affect decisions by businesses and purchases
of big ticket items.”
Intellpuke: You can read this article by New York Times staff
writer Peter S. Goodman, reporting from New York City, N.Y., in context
here: www.nytimes.com/2009/11/07/business/economy/07jobs.html?hp
New York Times staff writer Javier C. Hernandez contributed reporting to this news article.
|