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February 07, 2003
Hiring Hits to 20-Year Low
The
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6 percent unemployment rate reported for December isn't unusual for an economy pulling out of a recession, but forecasters remain concerned about this hiring slump, the New York Times reports. The newspaper calls it the worst in nearly 20 years.

Executives tell the newspaper that they remain jittery about adding new hires in significant numbers. Instead, they have focused their attention on increasing production, according to the Times. And executives aren’t sure when the slump will end.

In December, the Conference Board, a research group, reported that the number of help-wanted advertisements in newspapers fell to the lowest level in nearly 40 years.

The dearth of hiring is also affecting the economy in other ways, the Times reports. In two years, the number of people still looking for work and who have been unemployed for at least six months has tripled, rising to 1.9 million.

Another consequence of the slump is that many people get discouraged and stop looking for jobs. The newspaper reports that number of people who are not a part of the labor force has jumped by more than a million, according to Labor Department statistics. Many leave the work force for other reasons, such as retirement, but the newspaper contends the numbers suggest that many get discouraged and discontinue their search.

The Times notes that the economy grew at a rate of 2.8 percent from the end of 2001 to the end of last year. Typically, the Times reports, a growth rate like that should produce demand for “tens of thousands” of new jobs a month. This demand didn’t materialize and firms continued to trim payrolls, the New York Times reports.

Although some signs have appeared that the economy is recovering, executives tell the newspaper they remain cautious because the signs have proven to be fleeting before.

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