Archive for Saturday, March 6, 2010

National job market healing, but slowly

March 6, 2010


— At last, the unemployment crisis seems to be easing. That’s the good news.

The bad news? Job creation remains scant because companies still lack enough confidence in the economy to ramp up hiring.

The U.S. jobless rate held steady at 9.7 percent in February. And employers cut 36,000 jobs — fewer than predicted. Those figures signaled that the job market is slowly healing.

Some economists said the jobless rate may have peaked and predicted the employment report for March will kick off a string of monthly job gains.

“We’re on the cusp of some job growth, finally, finally,” said Stuart Hoffman, chief economist at PNC Financial Services Group.

The Labor Department report issued Friday cheered Wall Street, too. The Dow Jones surged 122 points, or about 1.2 percent.

But there’s a long way to go. The recession eliminated about 8.4 million jobs. The slow-motion recovery means hiring is expected to remain feeble for the rest of the year — at most a net gain averaging about 100,000 a month.

To put that in perspective, about 125,000 new jobs are needed each month just to keep up with population growth and prevent the unemployment rate from rising.

To reduce the jobless rate significantly, employers would need to create 200,000 to 300,000 jobs a month. But most of them are waiting to see stronger sales, more spending by consumers and businesses, and a more vigorous global rebound to stimulate demand for U.S. goods and services.

Some encouraging signs that consumers are more willing to spend emerged in reports earlier this week. Shoppers hit the malls and spent more freely in February. And activity in both the manufacturing and services industries of the economy is growing.

The jobs picture is gradually brightening at a time when the U.S. economic rebound is faring better than Europe’s. The 16 nations that use the euro currency scarcely grew in the fourth quarter, scratching out a 0.1 percent gain.

Still, the U.S. economy is lagging behind those in Asia. Economies such as China and South Korea largely escaped the downturn that followed the 2008 financial crisis. China’s economy grew 8.7 percent last year.


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