Finally, a jobs tally with a positive surprise

Labor Department numbers show a rise in jobs in September after seven months of decline.

Maybe, just maybe, the job picture in the United States has begun to improve.

That's the hope kindled by news that a key measure of the number of jobs in America rose by 57,000 in September, following seven months of declines.

The increase is not much, in a nation where some 2 million people have been out of work for six months or more, but it could portend better times ahead.

Coming after months of disappointing news, the small rise in America's nonfarm payroll Friday represented a welcome surprise on the positive side. The Labor Department also reported that the number of jobs lost in August was also revised for the better: to 41,000 rather than the 93,000 reported a month ago. The unemployment rate held steady at 6.1 percent.

The key question now is whether the economy is reviving to the point where businesses can no longer meet customer needs by coaxing more output out of each worker. Productivity has been surging recently - increasing America's efficiency but holding back job creation.

"Companies have been squeezing as much as they possibly could out of their workforces for a long time now," notes Bill Cheney, chief economist of John Hancock Financial Services in Boston. "We may be reaching the point where companies can't continue growing without adding staff."

Investors cheered the jobs report. Share prices rose on Wall Street, with the Standard & Poor's 500 index, for instance, ending the week up 3.3 percent.

"Things are getting better," President Bush proclaimed.

But most observers, even Republicans, were cautious.

"Although one month of data does not mean that employment growth will definitely strengthen in coming months, it is an encouraging sign," stated Rep. Jim Saxton, a New Jersey Republican and vice-chairman of the Joint Economic Committee (JEC) in Congress.

Democrats tended to look on the gloomy side. The 10 Democratic candidates for the presidency have jumped onto the economy and unemployment as a campaign issue. They say the Bush tax cuts benefit the rich and expand the federal budget deficits, but are failing to provide many jobs for ordinary Americans.

Rep. Peter Stark, senior Democrat on the JEC, said the "paltry job gains ... don't even begin to make a dent in the more than 3 million jobs lost on President Bush's watch." Unless more than a million jobs per month are created over the next three months, the nation will experience the most protracted private-sector jobs recession since the 1990s, he said.

Temporary-worker payrolls rose by 33,000 in September, the fifth straight monthly gain. Sometimes businesses add temporarily to their payrolls, rather than incur the added expense of pensions and healthcare involved in hiring a more permanent worker.

Wall Street economist Lawrence Kudlow sees this as "very positive sign" that private payrolls will grow strongly in the fourth quarter of this year and first quarter of next year.

Meanwhile, the ratio of those employed to the entire population fell to a 10-year low of 62 percent.

Some 29,000 manufacturing jobs were lost in September, a relatively small monthly drop. Jerry Jasinowski, president of the National Association of Manufacturers, maintained, "The employment situation is stabilizing."

With those unemployed for six months or more at a 20-year high of 23.2 percent of the total jobless, Democrats in the House introduced a bill Thursday that would provide 26 weeks of extended unemployment benefits to all jobless workers who need them through June 2004, and provide an extra 13 weeks to workers who have already exhausted their benefits and remain unemployed.

Another encouraging sign is that out-of-work managers and executives are taking less time to find new jobs. That typically indicates a rebound in the general job market, says John Challenger, chief of a Chicago outplacement firm.

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