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July 15, 2002
Another 'Jobless' Recovery?
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workers, the recovery is starting to look like the "jobless recovery" of 1991-92, according to the Wall Street Journal, which cites weak stock prices and the damping effect corporate scandals on hiring plans as factors.

"Businesses are hesitant to expand, due to concerns about the stock market and heightened uncertainty over the geopolitical outlook," Bank Credit Analyst, a financial-markets research firm, said in a report Friday. "The attack on accounting standards and concerns about re-regulation are additional factors keeping corporate executives from expanding."

"The economy is on the road to recovery [though] the recovery is a bit anemic," said Labor Secretary Elaine Chao. "The labor market lags behind changes in real economic activity."

The Journal notes that the number of nonagricultural jobs rose just 36,000 in June from May, while the unemployment rate edged up to 5.9% from 5.8%.

Perhaps more ominously, the newspaper also observes that government statisticians once again revised downward prior months' levels of employment, revealing a job market far weaker than previously thought.

The Labor Department regularly revises its payroll estimates, but this year those revisions have been consistently negative, with every month's report being revised downward - often sharply, the Journal reports.

For instance, the department's Bureau of Labor Statistics originally said payrolls rose 66,000 in February. But now it says they fell 165,000. An originally reported gain of 58,000 jobs in March is now a loss of 5,000, and a gain of 43,000 in April is a loss of 21,000. May's gains were revised down to 24,000 from 41,000.

A "benchmark" revision a month ago also reduced employment throughout last year. Employment in November 2001 was 340,000 below original estimates.

As a result, employment now shows 13 consecutive monthly declines through April. That exceeds the 11 straight losses in 1990-1991, though those declines were steeper. Back then, job losses continued intermittently through 1991 and into early 1992.

The Journal speculates that a similarly tough spell could be in store for workers now, given that the recovery has so far been subpar and that employers are more determined than usual to boost output rather than the number of employees.

Lois Orr, acting commissioner of the Bureau of Labor Statistics, said recent revisions haven't been statistically significant, but she couldn't explain why they have been overwhelmingly negative.

To read the Wall Street Journal article, via, click here.
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