Job growth to be tepid

Jerome Idaszak, associate editor of The Kiplinger Letter, suggests that an economy emerging from the recession is not likely to result in job growth.

“We still see a recovery beginning later this year, but growth will be tepid at best. Having fewer people working and those employed working fewer hours will diminish consumer income and consumer spending,” Idaszak noted in this commentary.

Idaszak’s explanation included the following comments.
• The unemployment rate inched up to 9.5% from 9.4%. John Silvia, chief economist with Wachovia Corp., says those numbers don’t tell him the economy is getting worse. “We’re just not improving as much as people hoped. The idea of job growth by the end of this year is out the window.”

• The jobs lost in June bring total employment to 131.7 million. Heidi Shierholz, labor market economist with the Economic Policy Institute, a think tank in Washington, D.C., says that we’re back to where we were about nine years ago.

• Even when jobs begin to increase, the unemployment rate will stay high, peaking at well above 10% next spring. That’s because it takes a monthly job increase of about 127,000 just to keep the jobless rate unchanged.

• Although there are fresh signs that manufacturing production is on the rise again, the improvement isn’t translating into job gains. In June, manufacturing shed 136,000 jobs as companies remained very cautious about adding to their payrolls in case the economy takes a turn for the worse again.

• Adding to the dismal picture, the average workweek dipped to 33 hours from 33.1 in May, setting a new low for this number, which goes back to 1964.