Recently released economic statistics show the U.S. lost 63,000 jobs in February. An executive at a job placement firm and a former top-level Department of Labor official examine the factors behind these job-market losses and what lies ahead for the American economy.
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Ray Suarez has our jobs story.
The slumping economy’s losses are now spreading from the world of housing, credit and finance into the job market.
The government reported today that nearly 90,000 jobs have been eliminated in the first two months of this year.
For a closer look, we turn to:
Lisa Lynch, a former chief economist at the Department of Labor, she’s now a professor of economic affairs at the Fletcher School at Tufts University; and John Challenger, chief executive officer of the outplacement firm Challenger, Gray & Christmas.
Professor Lynch, what does that jobs number tell you about the state of the economy?
LISA LYNCH, former Department of Labor chief economist:
Well, Ray, when we look deeper into what was behind that decrease in employment that we saw for the month of February — and, as you noted, a revision down for January, as well — there’s a lot of bad news in this report.
First of all, we had a decrease of 63,000. But if we took out gains in state and local employment, the private sector in the United States actually contracted 101,000 jobs in the month of February. And that’s the third month in a row that the private sector has actually experienced a net job loss.
On top of that, there are a lot of people out in the labor market who are in part-time employment but actually want to work full-time. So we have 5 million people in the United States right now who would like to work full-time but, because of economic conditions, cannot find full-time employment and are only in part-time employment.
If we look…
… even though the number declined by tens of thousands, as the professor just cited, the unemployment rate actually declined slightly. How does that work?
JOHN CHALLENGER, Challenger, Gray & Christmas:
Well, what happened was about 450,000 people left the job market; they stopped looking.
And there are a lot of people out there, if you come out of the mortgage business, and you’re an underwriter or you’ve been in construction, and there just aren’t any jobs out there because those two areas of the economy are just not ticking, you might say to yourself, “I’m going to wait until the weather is better. I’m just not going to be looking.”
And so what happened, with all those people leaving the job market, that it caused the unemployment rate to go down.
Do people whose unemployment benefits run out also enter that “no longer counted” category as part of the active workforce?
No, they can continue — if they’re looking, if they’re going out and seeing people, they get counted. But we are seeing, again, more and more people who are looking in this job market, who’ve been out of work for a longer period of time. The market’s getting tougher.
Another thing that happened here was that temporary jobs have continued to drop, and dropped this month. That suggests that many employers who brought those people on to handle their surges are looking to those people first.
As their businesses wind down or get worse, they’re taking them off their payrolls. And so we’re seeing also a drop in a very robust category, consistently over the last couple of years, in this report, and that is professional and business services.