Unemployment Rate Falls; Few Jobs
Added
Fri Jan 9,12:05 PM ET
story.news.yahoo.com
By LEIGH STROPE, AP Labor Writer
WASHINGTON - The nation's unemployment rate dropped to 5.7
percent in December to the lowest level in 14 months, but employers
finished the year without many help wanted signs for the holidays,
adding just 1,000 new jobs.
The 0.2 percentage point drop in the jobless
rate occurred because fewer people were
looking for work, the Labor Department
said Friday. More than
300,000 people gave up their search for jobs
and dropped out of the pool of available
workers.
"The rate is going down, but it is going down
for the wrong reasons," said Bill Cheney,
chief economist at John Hancock Financial
Services, noting that it fell not because
people were finding work. "That doesn't
make you feel really good about the state of
the jobs market."
The weak report prompted investors to sell
off stocks in early trading on Wall Street.
President Bush seized on
the lower jobless rate as reason to be
optimistic about the economy.
"Unemployment dropped today to 5.7
percent . That's not good enough - we want
more people still working," the president told a gathering of women small
business owners at the Commerce Department (news - web sites). "But
nevertheless, it is a positive sign that the economy is getting better."
Weak holiday hiring by retailers was to blame for holding back job gains.
Analysts were surprised by the anemic job growth because they
expecting companies to add 100,000 to 150,000 jobs to their payrolls
last month. But the net gain was just 1,000 jobs - which is "quite
shocking," Cheney said. "I would certainly have not expected anything
resembling that."
Employment in the nation's stores, malls and even gas stations dropped
by 38,000, the report said, and manufacturing continued a 41-month
slide by losing 26,000 jobs.
The nation's factories have been on life support, and the sector shed
about a half million jobs in 2003.
The economy has lost about 2.3 million jobs since Bush took office, a
statistic that Democrats hope to use against Bush as he seeks
re-election.
"Rather than focusing on putting a person on the moon, I think the Bush
administration should focus on putting people back to work," said Rep.
Rahm Emanuel, D-Ill., a former Clinton White House aide, citing Bush's
planned announcement next week of goals of sending Americans to
Mars and establishing a permanent human presence on the moon.
The Bush administration contends that stronger economic growth -
helped by the president's three tax cuts - will eventually lead to more
meaningful job creation on a sustained basis.
Commerce Secretary Don Evans said Friday's report reinforces the need
for Congress to "make tax relief permanent and act with urgency on the
rest of President Bush's jobs and growth agenda."
For that sustained growth, analysts are looking for monthly payroll gains
of 200,000 to 300,000 - a mark the economy is far from reaching.
December marked the fifth consecutive month of payroll gains, however
slight.
Other areas of the economy are surging, but the jobs market has been a
weak link in the recovery. To remain competitive in the global economy
and out of concern that economic improvements wouldn't last,
companies have been hesitant to take on added costs of hiring new
full-time workers. Instead, they have been working their employees
longer and harder. Hence, the productivity of American workers has been
at high levels in recent months.
But with all the positive signs in the rest of the economy, economists
have been expecting the jobs market to improve.
"Most people were expecting it to be a reality by this stage, so it's a
little alarming we're still relying on faith," Cheney said.
Friday's report showed that employers have added just
277,000 new jobs since July, cutting earlier estimates
of growth in October and November.
Some areas of the economy added jobs last month.
Employment continued to rise in the services sector in
temporary employment services, education and health
care. Construction companies also added to their
payrolls.
But the cuts outweighed any gains. Analysts were
concerned about the lack of employment growth for
retailers in their most important month of the year. A
rise in Internet shopping could partially explain why
fewer stores were hiring, economists said.
The federal and state governments also reduced their
payrolls last month, as did banks and mortgage
companies, reflecting the uptick in mortgage interest
rates. |
