Rising Economy Won't Trigger Surge in Jobs

Unemployment seen persisting while business activity picks up; structural changes a factor

THE United States government's chief economic forecasting arm suggests that the recession may be ending. But even if US Department of Commerce indicators prove to be pointing the path toward recovery, finding new jobs will continue to be difficult for thousands of Americans, according to employment experts. "Unemployment is traditionally a lagging indicator," says Cynthia Latta, an economist with DRI-McGraw Hill, an economic consulting firm in Lexington, Mass. The jobless rate usually does not post a quick rebound following a recession.

"Companies are slow to add new workers, because they want to make certain the recession is definitely over" before increasing their labor costs, says Ms. Latta.

Indeed, DRI says that when the government announces the May unemployment rate on Friday, the rate may jump a tad - to around 6.8 percent - from 6.6 percent in April. The April rate, which showed unemployment dropping from 6.8 percent in March, may have been a statistical fluke, Latta says.

The Commerce Department reported on May 31 that the composite index of leading indicators climbed 0.6 percent in April. That was the third monthly gain for the index. Factory orders were also up in April for the first time in six months. Many economists believe that the two indicators, taken together, are signaling an end to the recession.

According to the Conference Board, an economic group in New York, real gross national product should grow by 2.4 percent this quarter, compared with a decline of 2.8 percent the first quarter of 1991. For the third quarter, growth should be around 2.3 percent, and then 1.6 percent in the fourth quarter, says the board.

DRI-McGraw Hill also sees a pattern of slow economic growth later this year, followed by 3 percent growth during 1992. But such numbers will not provide much of a jump-start for significant job gains.

Thus, DRI says that the unemployment rate will peak at 7 percent during the third quarter of this year, and drop to 6.9 percent in the fourth quarter. The upper Midwest, the Southwest, Southeast, and Pacific Northwest are all expected to grow at faster rates than the Mid-Atlantic states or New England, which is expected to be "a laggard" in recovery, Latta says.

Another signal that recession is easing is reflected in a survey of corporate hiring plans conducted by Manpower Inc., a Milwaukee-based temporary employment company. In its latest quarterly poll, 22 percent of the more than 15,000 companies surveyed said they expected to hire more workers during the third quarter. Manpower officials say this represents the strongest showing since the third quarter of 1989, when hirings began to slide.

But while new jobs will be available - particularly from smaller businesses - the overall employment market is expected to remain tight. Those most affected, say job experts, will be college students graduating with bachelor's degrees and facing one of the toughest job-finding seasons in recent years; teenagers and youths seeking summer jobs; professionals who work in such high-salaried sectors as the securities industry and finance; and some manufacturing workers, such as in the auto industry, which ha s

been hard hit.

"There are just not enough college-level jobs for college graduates," says L. Patrick Scheetz, director of Michigan State University's Collegiate Employment Research Institute. According to Michigan State, which monitors company hiring plans, there will be some 9.8 percent fewer jobs for college graduates this year than last year. But last year, there were 13.3 percent fewer jobs than in the 1989 school year. The upshot, says Dr. Scheetz, is that in the past two years, college grads have seen a loss of m

ore than 20 percent of available jobs.

Still, says Scheetz, jobs are available for students who search out all options and are receptive to settling for jobs that might normally go to those without college degrees. Companies, he says, have indicated that they will be willing to promote the graduates once the economy turns around and there is clear growth.

High school students are also expected to have a tougher time finding work this summer, since many companies are not financially able to offer as many part-time jobs as they did before the recession. According to the US Department of Labor, many teenagers have given up looking for summer work. The summer work youth participation rate dropped from 77.5 percent in 1989 to 75.2 percent last year. It is expected to be lower this year.

One factor aiding teenagers who aggressively seek jobs: the overall youth labor force continues to decline. This summer 23.3 million youths will be part of the labor force, down by 440,000 from last year, according to Steve Haugen, an economist with the US Bureau of Labor Statistics (BLS) in Washington.

The challenge for the adult work force - male and female, white and nonwhite - is that entire categories of jobs are shrinking or currently facing structural changes independent of the recession. In the Greater New York region, such sectors as retailing, Wall Street financial houses, banking, and insurance are undergoing structural reorganization, says Samuel Ehrenhalt, regional BLS commissioner.

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