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U.S. Economy in Worst Hiring Slump in 20 Years!(6 posts)

U.S. Economy in Worst Hiring Slump in 20 Years!velocity
Feb 6, 2003 11:13 AM
By DAVID LEONHARDT (from today's New York Times)
The economy has fallen into its worst hiring slump in almost 20 years, and many business executives say they remain unsure when it will end.

The employment decline has become even worse than it was at a comparable point in the so-called jobless recovery of the early 1990's, according to recently revised statistics from the Labor Department. The economy has lost more than two million jobs, a drop of 1.5 percent, since the most recent recession began in March 2001, as layoffs have continued despite the resumption of economic growth more than a year ago. The decline was 1.3 percent at the same point in the business cycle a decade ago.

About one million people appear to have dropped out of the labor force since last summer, neither working nor looking for a job, according to government figures.

The surge in discouraged workers is the most significant since the months immediately after the recession's start. This suggests that the pain of joblessness has worsened even though the official unemployment rate, which counts only people looking for work, held steady at 6 percent in December.

"Last year," said Tom Koehn, 50, who lost his job at a machinery maker in South Bend, Ind., in May, "I heard a lot of people say, `Come back after the first of the year; if the economy picks up, we might hire some people.' But so far, I haven't found anybody who's hiring."

The shortage of jobs has also slowed wage growth so that only workers in the most affluent groups are still gaining ground on inflation, ending a six-year streak of broad increases in buying power.

Manufacturers of durable goods like computers, furniture and steel have made the deepest cuts, with one of every nine jobs in these industries eliminated since early 2001. Airlines, brokerage firms and makers of clothing and textiles have also each cut at least a tenth of their work forces. Government agencies have been among the few employers that continue to expand, although many states are now laying off employees to close budget deficits.

Executives say they have been disappointed too many times by the halting growth of the last year to begin hiring workers in significant numbers. While the government is likely to report tomorrow that the economy added some jobs in January, many executives are still waiting to be convinced that business has regained a solid footing after the collapse of the bubble of the late 1990's.

The possibility of a war with Iraq and an increase in oil prices offers another reason for hesitation, they say. Many companies have also used new technologies and management techniques to produce more with the same number of employees.

"This is what I call the new reality," said Robert M. Dutkowsky, the chief executive of J. D. Edwards, a software maker in Denver that has kept its work force at 5,000 people for the last few years. "The environment we're operating in is what it's going to be like for a while."

In his State of the Union address last week, President Bush called the improvement of the job market his "first goal" for the coming year and asked Congress to pass a $670 billion, 10-year tax cut.

"We must have an economy that grows fast enough to employ every man and woman who seeks a job," Mr. Bush said. "With unemployment rising, our nation needs more small businesses to open, more companies to invest and expand, more employers to put up the sign that says, `Help Wanted.' "

Most economists say that the tax plan and another $4 billion in help for the jobless would have only a small effect on the economy this year.

The number of companies cutting jobs has spiked since November, with AOL Time Warner, Boeing, Dow Jones, Eastman Kodak, Goodyear, J. C. Penney, McDonald's, Merrill Lynch, Sara Lee, and Verizon all announcing new layoffs. Barring a sustained rise in oil prices, however, the cuts appear likely to taper off in the coming months as the econo
a link to the article for the full storyvelocity
Feb 6, 2003 1:14 PM
Ah, the truth finally surfaces! The dominoes will start fallingTig
Feb 6, 2003 2:19 PM
...soon, I'm afraid. As more people remain jobless, loans and mortgages will be unpaid and forfeited. People will continue to spend less and less. The economy will decline further, stocks will drop for the 4th strait year, causing yet more layoffs to complete the cycle. Meanwhile, our president is off playing global policeman and raising the government deficit to an all-time high. God help us all!

In the last few years, US stocks have dropped at a level equivalent to a $2000 loss for each person on the planet!
yes, but shark attacks are down, too!mohair_chair
Feb 6, 2003 3:21 PM
More people are out of work, but the number of unprovoked shark attacks are down. By year:

2000: 85
2001: 72
2002: 60

Based on this pattern, I project the following:

2003: 47
2004: 35
2005: 22
2006: 10
2007: zero!
Had my first interview this week, been out of work for 10 monthsjs5280
Feb 6, 2003 3:58 PM
Things are bad, fortunately I can scrape by on student loans, but it's just that, just getting by. Hopefuly something comes out of the interview, we'll see. It's not my dream job, but it is an area (Project Management systems) where I want to build my skills, so just getting the foot in the door and a paycheck would be nice. What's strange though is I do find jobs posted and do apply. I just never heard anything back till this last one. I kind of wonder how many companies keep posting positions in the hopes that their hiring freezes will be lifted.
Had my first interview this week, been out of work for 10 monthsmtber
Feb 6, 2003 4:06 PM
hey js5280,
I assume that you are from the Denver area. I experienced the same "black hole" effect that you are when I was looking for a job in 9,10,11/2001, also a bad time. I was told that a lot of the bigger companies have ongoing contracts w/ the Denver Post for ad space in their classifieds. They post positions that are not really open and skim through the 100s of resumes looking for that "pin in a haystack", exceptional person, whom they will then make a position for. Kind of sucks. Good luck in your job search - maybe things will pick up in the spring.