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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: CalculatedRisk who wrote (7361)	2/8/2004 5:00:37 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

Sluggish U.S. job growth may threaten recovery Sunday February 8, 11:32 am ET By Andrea Hopkins WASHINGTON, Feb 8 (Reuters) - Another month of disappointing job growth in America has sown a seed of worry among analysts that the fragile economic rebound may not be strong enough to last. For months now, economists have been forecasting an improvement in employment. Each month, they've been disappointed, and the news from January was no different. While 112,000 jobs were created and the unemployment rate dropped to 5.6 percent -- the lowest in two years -- forecasters, traders and economists had been expecting much better. Most had hoped to see payrolls jump by 150,000, with the more optimistic estimating gains of 300,000. "It's just flat-out disappointing. We're just not creating many jobs," said Steven Wood, chief economist at Insight Economics in California. He worries the sluggish employment growth could eat into consumer confidence just as the economic recovery begins to gather steam -- undermining the shopping strength that helped pull America out of the recession. "Unless there is more job creation and faster wage growth, it is difficult to see how real consumer spending, (which makes up) 70 percent of the economy, can continue to sustain strong economic growth," Wood said. Healthy 4 percent GDP growth in the final quarter of 2003 and sizzling 8.2 percent growth the previous quarter had spurred hopes that real hiring was just around the corner. U.S. President George W. Bush promised summer tax cuts would ease unemployment, which looms as a key issue in the November elections. Democrats blame Bush's economic policies for the loss of 2.2 million jobs since he took office. BROTHER, CAN YOU SPARE A JOB? For five months in a row, the economy has eked out employment gains -- but the pace is well below the 150,000 new jobs economists believe are needed each month just to keep up with population growth, and jobless Americans are desperate. "I'd be prepared to work in a warehouse, I'd be prepared to do assembly work," said Donald Thomas, a 46-year-old unemployed marketing and client relations consultant who has been looking for work since being laid off in July 2002. "I'm at the point now where quite frankly I might consider just managing a Walgreen's store after midnight. I need to get back in the work force," the Chuluota, Florida, resident said. But Thomas knows just getting his foot in the door of a new industry is daunting -- especially since his most recent retail experience was when he was 19. Employers also have a hard time believing he's willing to take a low-paying job after earning $100,000 a year as an independent contractor. "I'm considered well-overqualified for positions I'd be willing to take, and don't have enough credentials in other positions," he said. Even those who still count themselves among the employed in America are struggling to make ends meet. Self-employed computer programmer Thomas Mooney -- who bills himself as the "president/janitor" of his Minneapolis company, TeleProc -- said he cannot last much longer with so little work in an industry that was once booming. "I'm barely employed -- no income yet this year," Mooney said. "I have $7,000 in future prospect business and that is all I know about for the rest of the year." Mooney, a 52-year-old father of two teenage boys, is convinced the job market is even bleaker than official figures suggest, since he and other idled independent contractors do not collect unemployment benefits and thus are never counted among the unemployed. "If I had to put a label on myself, it would be 'severely underemployed,'" he said. "And the market is still getting worse rather than better, as far as I can see." biz.yahoo.com