In America, if you don't have a job, it sucks to be you.
Americans Drop Out of Labor Force, Posing Risks for Bush, Fed (excerpts from http://quote.bloomberg.com/apps/news?pid=10000103&sid=aEUT7DAoLUZ8&refer=us)
March 8 (Bloomberg) -- Anthony Whitmore lost his job as a die press operator at Midland Steel Products in Cleveland 10 months ago and holds little hope of finding work. In Chester, Pennsylvania, Chris Rabzak, a former aerospace engineer with a law degree, is stretching out his master's program in business administration rather than jumping into the labor market.
``Every month some economist comes out and says that next month or next year things will get better -- I don't believe them anymore,'' said Rabzak, 36. ``In this economy, I'm not optimistic about finding a job,'' said Whitmore, 40. Rabzak and Whitmore are among the 1.6 million Americans who have dropped out of U.S. workforce in the past year. The percentage of those working or looking for jobs has skidded for four years and fell in February to 65.9 percent, a 16-year low, the Labor Department said Friday in Washington. Last month, 588,000 people left the labor force as the economy created just 21,000 jobs, a sixth of the median forecast in a Bloomberg News survey of 65 economists.
Job growth averaged just 60,000 a month since September, and the U.S. has shed 2.3 million positions since Bush became president in January 2001, according to Labor Department statistics. To keep up with population growth, the U.S. needs to create 150,000 jobs a month, according to Fed estimates.
After growing at a 6.1 percent annual rate in the second half last year -- the fastest six months since 1984 -- the world's largest economy may expand 4.6 percent this year, based on the median estimate in a Bloomberg News survey last month. ``If we get 4 percent growth this year and the participation rate is declining, it means we are far below potential,'' said James Glassman, senior economist at J.P. Morgan Chase & Co. in New York, in an interview Friday.
The situation is ``very astonishing,'' said Lyle E. Gramley, a former Fed governor and now a senior economic adviser with Schwab Soundview Capital Markets. ``Here it is, two-and-a-quarter years into the recovery, and we're still having trouble creating jobs. My confidence about when the job pickup is likely to begin is waning.''
The U.S. added 21,000 jobs in February, just one sixth of the 130,000 media forecast of economists polled by Bloomberg News, the Labor Department reported Friday. The results fall short of what would be needed to raise this year's average nonfarm payroll by 2.6 million jobs to the 132.7 million level predicted by the White House last month. Bush and his advisers have since declined to back that target.
The exodus of workers from the labor force may mean the nation's unemployment rate of 5.6 percent in the past two months looks better than it really is. Returning discouraged workers to the labor market and adjusting the participation rate back to the long-term trend would increase the unemployment rate last month to 7.1 percent, said Ian Morris, chief U.S. economist at HSBC Securities USA Inc. in New York, in an interview Friday.
``The unemployment rate is really understating the lack of job availability,'' said Harry Holzer, a former chief economist at the Labor Department who is now a professor of public policy at Georgetown University in Washington, in an interview Friday. ``The drop in the participation rate is telling us that the labor market is weak.''