Why Claudia Howat is looking for work again

The US has gained jobs for three months now, buoying hopes of the long-term unemployed.

America's "job fair" is cranking up again.

Employers are hiring carpenters for construction sites, healthcare workers at clinics, sales associates at the mall, and professionals such as lawyers and accountants. Some of those being hired are young - just getting out of college or high school. Many more are skilled senior workers, who need extra income. Unfortunately, many Americans who have long been out of work have yet to participate. Jobless assembly-line workers, in particular, are still waiting for something to happen.

That's a snapshot of the nation's labor market, which is finally starting to shake off the "jobless recovery" moniker.

It is an economic shift with big political ramifications: A marked improvement in the economy makes it much tougher for the Democrats to unseat President Bush. And, because job growth is such a powerful force, it could have ripple effects, such as reducing the federal deficit and fueling sustainable economic growth next year.

Evidence of job creation mounted last Friday, when the Department of Labor reported that the US unemployment rate dropped to 6 percent in October, from 6.1 percent the previous month. More important, 126,000 new jobs were created, adding to 125,000 in September and 35,000 in August.

Turning point?

"Three consecutive months is the confirmation that a self-sustaining economic recovery is here to stay," says Sung Won Sohn, chief economist at Wells Fargo Banks in Minneapolis. "Employment gains are broadly based and spreading."

Some employment experts warn that further confirmation is needed to say this is an important turning point. "Is this just another stop and start?" asks John Challenger, chief executive of Challenger, Gray & Christmas, a Chicago outplacement firm.

Predicting the return of job growth has been a frustrating experience for economists. Few expected productivity to increase as much as it has, allowing business to produce more with fewer workers. Over the past two years, productivity has risen at its fastest in 50 years.

At the same time, many companies are continuing to outsource production abroad, holding down job growth in the US.

But the latest numbers seem to indicate that business can no longer just crank up machines faster or send work overseas.

This improvement comes as Congress is debating whether to reextend federal unemployment benefits which expire on Dec. 31. The unemployed now receive 26 weeks of state benefits and 13 weeks of federal. Added aid "is needed, given the hardship at finding work," says Andrew Stettner of the National Employment Law Project in New York.

Indeed, the economy must continue to produce jobs to make a dent in the number of long-term unemployed - about 2 million people - and to get discouraged workers back on the pavement.

Last month, for example, the number of jobless who have stopped looking for work because they grown discouraged was 462,000 - a level that is about average for the year, says Terry McMenamin, an economist at the Bureau of Labor Statistics.

'Discouraged' no more

One of those discouraged workers is Claudia Howat of Tallahassee, Fla. She lost her job when the state Board of Regents was reorganized. Now she's taking all the part-time jobs she can find and using up savings. "When you look at the papers, the ads are not even there," she says. "For those who want a better job there's no where to go."

But discouraged workers are always alert to changes that may help them. The job news may get them back to checking the want ads. "It will prevent the unemployment rate from coming down to the 5.8 to 5.9 percent rate," predicts Stuart Hoffman, economist at PNC Securities in Pittsburgh. "But, if we are creating jobs, that is still good news."

Johnny Hill in Brenham, Texas, about 80 miles outside of Houston, is a case in point. He's a field engineer for the chemical and petroleum industry but has been out of work for 14 months. "The market is supposedly picking up," he says, "I've become more active" in looking.

The breadth of the hiring is good news as well, says Bob Gay, chief economist at Commerzbank in New York. "It's not just low-wage industries," he says. Last month saw an increase of 43,000 jobs in professions and business services. At the same time, he says, hiring of temporary workers is slowing. This is an indication that business is more confident of the economy and is willing to hire long-term employees.

That would be good news for people like Jeffrey Schwab of Seattle. A design draftsman, he's been out of work for over a year. His unemployment ran out three weeks ago, and he's now taken early Social Security. "I'm hoping to get back to work for a few more years," he says. "I've been sending out three résumés a week but haven't heard back from anyone."

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