Economic scene: Reasons to fret despite a spurt of jobs in the U.S.
By: Administrative Account | Source: New York Times
November 10, 2003 11:50AM EST
|
Edmund L. Andrews NYT
Monday, November 10, 2003 |
|
WASHINGTON Two weeks ago, the Treasury secretary, John Snow, ventured a prediction that struck many economists as dangerously brash: Rapid economic growth in the United States could produce as many as 200,000 new jobs a month over the next year.
But after the government announced on Friday that the country added about 126,000 jobs in October, Snow had reason to feel at least partly vindicated. "I'm not in the business of making estimates," he said. "But I do feel that with the continuing strong recovery we're going to see jobs pick up in the coming months."
It is far too early for Snow to declare victory. Even though economic growth surged at a 7.2 percent annual rate in the third quarter of this year, business executives around the country say they are still cautious about expanding their work forces and building factories.
A new economic study prepared for the U.S. Conference of Mayors concludes that wages are significantly lower in the service sectors that are adding jobs than the wages in manufacturing industries that have been losing jobs.
According to the study, prepared by the economic consulting firm Global Insight, the biggest job growth over the next two years will be in administration and support services, health care, travel and tourism. The average wage in those sectors over the next two years is expected to be $36,000, it said. By contrast, the average wage in manufacturing sectors that lost jobs is about $43,000.
"While you see jobs coming back, they are not coming back in the same sectors," said Kwame Kilpatrick, the mayor of Detroit. "Cities like Detroit have to struggle to find their niche."
The jump in employment last month was more than twice what most economists had predicted, and it came on top of new data showing that job growth in September was twice as high as the government estimated one month ago.
The upshot: After losing about 2.8 million jobs since early 2001, most of them in manufacturing, the United States has added nearly 250,000 over the past two months. Given the natural growth of the U.S. work force, the economy needs to add about 150,000 jobs a month before unemployment will drop much below its current level of 6 percent.
Still, the numbers could be very good news for President George W. Bush, whose biggest obstacle to re-election next November has been his track record on jobs. But the level of job growth seen in October might prove difficult to sustain. Corporate executives, though optimistic about the prospect of rising sales and profits, are still trying to squeeze extra output from increased productivity rather than adding workers.
Union Pacific is preparing for a year of strong growth. But although the big freight rail company is hiring, it expects productivity gains to allow its overall work force to remain at roughly its current size of 46,300 people.
"We're going to handle more business with fewer people," said Jim Young, chief financial officer.
In its regular survey last month of chief executives at large companies, the Business Roundtable found that 71 percent of executives expected their sales to increase in 2004 but only 12 percent expected to expand their work forces.
"Productivity continues to astonish everybody," said Henry McKinnell, chief executive of the drugmaker Pfizer. While executives are far more optimistic about next year than they were just a few months ago, he said, their mood is still "not ebullient."
In themselves, the new job numbers are not that impressive. By comparison with the rebound in jobs after other recessions, including the so-called jobless recovery of 1991, the pace of job creation remains anemic.
In a speech Thursday, one day before the Labor Department released the October employment data, a Federal Reserve governor, Ben Bernanke, took pains to emphasize that the labor market remained weak.
After an extensive review of all the possible reasons for the sluggish labor market, Bernanke said he was convinced that the biggest single cause has been the stunning growth in productivity - the amount of goods or services produced per worker.
Indeed, the government reported Thursday that productivity shot up at a blazing annual rate of 8.1 percent in the third quarter, and that comes after increases of 5 percent since late 2001.
The New York Times
- US Economy Adding Jobs; Stocks Soar
- U.S. Communists to support Democrats
- Weekly U.S. crude oil supply increases
- Wal-Mart Receives Target Letter From U.S.
- Toy Gun Prompts Shutdown at U.S. Capitol
- U.S. Economy: GDP Grows at Fastest Rate Since 1984
- Eighteen Die in Second Deadliest Day for U.S. in Iraq
- American Muslims Told to Leave Major U.S. Cities
- U.S. Caves to Greece, Won't Protect Olympic Athletes With Armed Guards
- After 9/11 Immigrants Continued to Flood into U.S.
- Feds Find High Risk That Terrorists Can Unleash 'Dirty Bomb' in U.S.
- Top U.S. general warns of harsh measures unless attacks stop
- U.S. Stocks Fall on Profit Concern; PeopleSoft, EchoStar Drop
- Record Imports Widen U.S. Sept. Trade Gap
- Latin American States Give Aliens ID Cards in U.S.
- U.S. to finance Muslim schools
- Nukes option by U.S. in Korea
- U.S. Jets Pound Iraq Guerrilla Positions
- U.S. deploys 20,000 troops along the Syrian Border
- U.S. Curb on China Imports Raises Retaliation Concern
- Markets End Week With Losses Despite Friday Gains
- Three U.S. Troops Killed in Iraq
- If U.S. estimates of 5,000 terrorists are right, more troops will be needed to deal with them
- Dollar Falls Versus Euro on Concern About Future U.S. Growth
- Security Trust to Be Dissolved by U.S. Regulators
- Dollar Drops Against Euro; U.S. May Struggle to Attract Capital
- U.S. Stocks Fall, Led by Wal-Mart and General Electric Shares
- Al-Qaida terrorists to gas U.S. subways?
- U.S. to deploy 3,000 additional Marines to Iraq
- Canada's View on Social Issues Is Opening Rifts With the U.S.
- U.S. Warns 'Rogue' States Over Nuclear Weapons
- Census: U.S. Arab Population Is Surging
- Dollar Weakens as U.S. Economy Adds Fewer Jobs Than Predicted
- U.S. diplomats ordered to stay indoors in Saudi Arabia
- Taiwan Says Vote Still on Despite Bush Warning
- Xinhua Finance to buy U.S.-based Market News
- U.S. Economy: Retail Sales Rose 0.9% in November, Led by Autos
- U.S. Dec. Michigan Sentiment Index Unexpectedly Falls
- U.S. Hits Target in Sea-Based Missile Test
- U.S. forces capture Saddam Hussein at remote farmhouse near Tikrit, Iraq
- IBM to Export Highly Paid Jobs to India, China
- U.S. Army Nabs Other Regime Figures
- Arabs still enter U.S. Illegally From Mexico
- U.S. Stocks Fall as Rally Tied to Hussein's Capture Fizzles
- Saudi terror apologists cancel plans to visit U.S.
- EU to Help U.S. to Fight Terrorism - Despite Privacy Concerns
- Dollar Drops to Record Against the Euro on U.S. Rate Concern
- Lawmaker to bring Syrian leader to U.S.?
- U.S. charges former governor with pattern of corruption
- Saddam Hussein’s Loyalists Infiltrated U.S. Operations in Iraq
- U.S. Seizes Boat With Links to al-Qaida
- U.S. Intelligence Learn of Possible Threats to New York and Other Cities
- U.S. to Raise Terror Alert to 'High,' Officials Say
- Dollar Weakens to Record; U.S. Says Terrorism Risks Increasing
- U.S. fails to follow terror money trail - New laws haven't helped track funding sources
- FBI picks 'terrorist' to probe bombing - Palestinian investigating attack on U.S. diplomats is suspected perpetrator
- U.S. Beef Industry Hit by Bans on Mad Cow Concern
- U.S. - Russian Team Seizes Uranium at Bulgarian Plant
- U.S. Quarantines Calves From Diseased Cow
- Cattle Futures Fall After Japan Bans U.S. Beef on Mad Cow Find
- Bush still eating beef despite mad cow scare
- U.S. Says Animal With Mad Cow Born Before Feed Ban
- U.S. December Consumer Confidence Declines to 91.3 From 92.5
- U.N. Fights U.S. Help in Disarming Libya
- U.S. Bans `Downer' Cattle Meat for Human Use After Mad Cow Case
- Report: U.S. to Defer $4 Billion in Iraq Reconstruction Work
- Zogby trashes U.S. in Saudi Arabia
- U.S. Economy: December ISM Manufacturing Index Rises to 66.2
- U.S. Ports, Ships Miss Security Deadline
- N. Korea to Let U.S. Experts See Nuke Site
- Missing Keys At U.S. Nuke Labs
- U.S. raids Baghdad mosque, worshippers protest
- U.S. November Factory Orders Fall 1.4%;
- Bush Wants to Allow Illegal Aliens Who Have Jobs
- Computer companies warn against interfering with moving jobs overseas
- U.S. December Payrolls Rise 1,000; Jobless Rate Falls
- U.S. Stocks Fall on Disappointing Jobs Report; AT&T;, SBC Drop
- Big U.S. Jet, Hit by Groundfire, Lands Safely in Iraq
- Russia, U.S. Hunt Air Leak in Space Station
- U.S. Following `Mahathir Doctrine' on IMF: William Pesek Jr.
- Fox seeks to open U.S. borders
- U.S. to Push Airlines for Passenger Records
- U.S. Economy: Trade Deficit Narrows, Producer Prices Stay Tame
- U.S. Islamic leader indicted for terror link
- Bush Administration Proposes Cutting U.S. Manufacturers' Taxes
|
