The Bureau of Labor Statistics’ unemployment report for February reminds one of the nightly radio broadcast by the London correspondent of CBS News in the early days of World War II. “There is no good news, tonight,” he would intone, as German armies roared from victory to victory on both the Western and Eastern fronts.
And so it is with the job market in February where more than 300,000 jobs disappeared and the official unemployment rate climbed to 5.8 percent, one tenth of a percent higher than in January. The BLS said another 4.8 million workers were forced to work part time because full-time jobs were unavailable, and 1.6 million jobless workers had given up the search for non-existent jobs and were no longer counted in the labor force.
Nor was there good news in any of the numbers:
* Manufacturing industries shed another 58,000 jobs, bringing the total number of workers employed in the nation’s factories to fewer than 11 million, the lowest level since February 1946.
* Initial claims for unemployment benefits rose sharply in February.
* Both Ford and General Motors plan major production cuts in the second quarter of 2003.
* The year-over-year comparison of job change in private payrolls has been negative for 20 straight months, the longest continuous decline since immediately after World War II.
* According to a survey by the National Federation of Independent Businesses, only 8 percent of small businesses said they are planning to expand in 2003. Just 19 percent said they had one or more jobs open, down from 31 percent in January 2001.
* More than one-fifth (22.1 percent) of jobless workers have been unemployed for 27 weeks or longer, a percentage not reached since 1992.
* Although more than 4.5 million workers collected $12 billion in benefits under the Temporary Extended Unemployment Compensation (TEUC) program, half of them were unable to find a job before exhausting ALL their unemployment benefits.
* President Bush refused to provide any money to extend the TEUC program in his 2004 budget. Unless Congress acts, the program will expire in May.
The jobless rates for the major worker groups in February were: adult men 5.3 percent, down 0.2 percent; adult women 5.0 percent, up 0.3 percent; teenagers 17.1 percent, up 0.3 percent; and for whites 5.0 percent, down 0.1 percent. Unemployment among African Americans rose by 0.3 percent and now stands at 10.5 percent while unemployment among Latinos declined by 0.1 percent to a still-high 7.7 percent.
Although that may have broken the string of bad news, other reports show that productivity grew by 4.8 percent in 2002, thus negating any need to hire new workers in order to increase production. It also helps explain why unemployment fluctuated in the 5.6 to 6.0 percent range throughout 2002 and will probably stay that way well into 2003.
Dean Baker, co-director of the Center for Economic and Policy Research, points to the loss of more than 300,000 jobs in February and the 0.1 percent increase in unemployment as indicators that the job situation may worsen in the coming months.
According to Baker the best way to understand the February decline in employment is to view the gain of 185,000 jobs reported for January as an anomaly. “The rate of job loss then averages some 90,000 over the last four months,” he says, “a pace of job loss that would typically be associated with a rise of 0.3 to 0.5 percentage points in the unemployment rate.”
Baker says the fact the unemployment rate has remained unchanged since October, while the labor force participation rate has fallen by 0.3 percentage points, “is likely to be reflected in higher unemployment rates in the spring.”
It is already being reflected in the way people see the economy. In February, 11 percent of people said jobs were plentiful, while 59 percent said they were not and 30 percent said they were hard to get
These are the bleakest assessments since December 1993 and a sharp decline since President Bush took office two years ago. Then, 49 percent of Americans viewed jobs as plentiful, while 38 percent said they were not plentiful and only 13 percent said they were hard to get.
The BLS will release its next unemployment report on April 4.
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