144,000 & Employment

by Larry 0 Replies latest jw friends

  • Larry

    Saw this in the NYT - The number rung a bell :)


    144,000 Jobs Were Added in August, a Bit of an Uptick


    WASHINGTON, Sept. 3 - The pace of job creation picked up modestly in August and the unemployment rate edged down, the Labor Department said on Friday in a report that offered some political relief to the White House but only tepid signs of a rebound in employment.

    The nation added 144,000 jobs in August, twice as many as in July but just barely enough to keep pace with increases in the adult population. The unemployment rate declined to 5.4 percent from 5.5 percent in July, with new jobs being created in most sectors of the economy.

    The report, coming less than 12 hours after President Bush outlined his goals for an ownership society to the Republican National Convention, provided evidence that employment will continue to grow in the months before the November election, but much more slowly than administration officials had hoped just a few months ago.

    Investors were relieved that the numbers were roughly in line with Wall Street forecasts, but analysts were far from ecstatic.

    Even with the new jobs created last month, economists said that employment had grown more slowly since the end of the recession of 2001 than during any previous recovery in the last half century.

    The nation still has about one million fewer jobs now than it did when Mr. Bush took office in January 2001, and it needs to generate about 150,000 jobs a month just to keep pace with population growth.

    "We're all sort of breathing a sigh of relief, but we're not out of the woods just yet,'' said Nariman Behravesh, chief economist at DRI/Global Insight. "This is just barely enough to keep the recovery going.''

    The good news for the economy and for Mr. Bush was that the pace of job creation and hourly wages was much healthier in August than in July.

    In addition, the Labor Department raised its estimates for job and wage growth in July, reporting that employment rose by 73,000 jobs rather than the original figure of 32,000.

    Mr. Bush, at a campaign stop in Pennsylvania on Friday morning, said the new report showed that the economy was "strong and getting stronger" and declared that "our growing economy is spreading prosperity and opportunity and nothing will hold us back."

    Senator John F. Kerry, the Democratic presidential nominee, responded that Mr. Bush's overall record on employment remains the worst of any president since Herbert Hoover.

    "President Bush is now certain to be the first president since the Great Depression to face re-election without creating a single job,'' Mr. Kerry said in a statement. "If you believe lost jobs mean that America is heading in the right direction, you should support George Bush and his policies of failure.''

    In practice, no president has more than an indirect effect on unemployment. Companies reduced payrolls as the economy slid into a recession in early 2001, just as Mr. Bush was taking office, and they kept cutting long after the recession officially ended in November 2001.

    Economists cite several reasons, most of them outside the president's control, behind the reluctance of companies to hire even when business is expanding. One factor, they said, is that many companies are still dealing with the overhiring that they pursued in the waning frenzy of the economic boom, much as they are still working their way through their overspending on technology.

    Hiring has also been restrained by sharp increases in productivity, the amount of output that companies can squeeze out of each worker, and by intense competition from manufacturers in low-wage countries, especially China.

    Employers have also become nervous about rapid increases in health insurance benefits, which have raised employment costs even though wages have been climbing slowly or not at all.

    That said, President Bush has opened himself to criticism by insisting that his tax cuts would accelerate growth and create millions of additional jobs.

    In a chart prepared by the White House Council of Economic Advisers in February 2003, the administration predicted that nonfarm payroll employment would climb by more than five million people by the end of 2004 - an average monthly gain of about 300,000 jobs - and that the tax cuts would specifically be responsible for more than one million of those new jobs.

    The administration's forecast has fallen well short: since last August, when employment finally began to rise, the nation has added 1.7 million jobs, or an average of fewer than 150,000 a month.

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