Saturday, September 04, 2004

The Long, Long Corner

U.S. Job Growth Up in August, Still Not Robust
Unemployment edges down to 5.4%. Bush and Kerry both seize on the data while campaigning.

By Warren Vieth, LA Times Staff Writer

WASHINGTON — U.S. employers added a net 144,000 jobs to their payrolls in August and the nation's unemployment rate dropped a notch to 5.4%, the government said Friday in a report fraught with political and economic implications.

The pace of nonfarm hiring was double the previous month's and in line with economists' expectations, but not nearly fast enough to erase President Bush's remaining job deficit by year's end. Unless employment growth averages 228,250 a month from September through December, Bush will be the first post-Depression president to finish his term with fewer jobs than when he started.

"At the rate that this administration is creating jobs, you're not going to have a net plus-one job in the state of Ohio until the year 2011," Democratic nominee Sen. John F. Kerry told supporters during a stop in one of the nation's hardest-hit swing states. "I don't think this is something to celebrate. I think it's something to get to work on. I think it's something to change."

Bush, though, thinks everything is fine and dandy. We're turning that corner. You know that corner? The one we've been 'turning' for a year or so with no noticable difference in anything except the stock market?

Bush, on the campaign trail after the Republican National Convention, hailed Friday's figures as proof "our economy is strong and getting stronger."

"We've added about 1.7 million new jobs since August of '03," Bush told supporters in Moosic, Pa. He said the 5.4% unemployment rate, the lowest since October 2001, was "below the average of the 1970s, 1980s and 1990s…. Our growing economy is spreading prosperity and opportunity, and nothing will hold us back."

In economic terms, the picture was mixed. The unemployment rate fell a tenth of a percentage point, from 5.5% in July. But the decline was caused in part by a 152,000-person net reduction in the labor force, partly reflecting some job hunters' giving up their searches.

The new figures show the recovery proceeding at a slower pace than during the spring, when job growth averaged 295,000 a month from March through May. But the pace is picking up. August's gain followed a July net increase of 73,000, which was revised up from last month's initial estimate of 32,000.

Employers need to add 125,000 to 150,000 net new jobs every month just to keep up with population growth, economists estimate. It would take even more growth to substantially reduce the unemployment rate, which climbed from 3.8% in April 2000 to a post-recession peak of 6.3% in June 2003.

If these anemic numbers prove anything, it is that as far as workers are concerned, the economy is in stasis: we've lost 3.7 million jobs in the last 4 years and haven't even added enough new ones to cover first-time workers entering the workforce during that time, never mind all the people who lost those jobs. The yo-yo month-to-month numbers show instability and indecision at best and the stutter-step growth of an economy teetering at the edge of dissolution at worst--hardly a performance you want your president to be satisfied with, especially given the nature of those new jobs.

Last month's job growth was concentrated in the services sector, which added 108,000 payroll positions, the Labor Department reported. Education and health services increased by 45,000, professional and business services by 32,000, government by 24,000 and financial services by 18,000. Retail employment dropped 11,300, and information services lost 10,000.

Construction firms added 15,000 jobs in August. The nation's manufacturing sector added 22,000 jobs, boosting its gains to 107,000 since January. During the first three years of Bush's presidency, U.S. factory employment fell by 2.8 million.

So a mere 37,000 good jobs as against 108,000 minimum-wage service drudges that won't pay the bills. This is the economy he's bragging about? This is the corner that leads to prosperity? For who? It certainly isn't workers.

[A]verage hourly earnings increased 0.3%, somewhat more than expected, after a 0.4% gain in July.

Wow! Only slightly less than 3/4 of a percent in two months! What a gain! What prosperity! A couple months more like that and our pay will be outdistancing inflation--sort of. I'm excited, aren't you?