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July 5, 2002

Job Growth Would Be a Refreshing Change for the U.S. Economy

In 1999, the University of California posted an ad for a programming analyst. The pay was good, the benefits were excellent, and advancement was possible. After running for three weeks the result was: zero applicants. A world gone mad with visions of instant millions from stock options had no place for such an ordinary job.

Today, that same advertisement draws more than 300 resumes, including some from former vice presidents, group leaders, and technology executives whose dreams have gone bust. With glamour jobs harder to find in the American economy these days, our attention is drawn once again to the more stolid, ordinary jobs, and the more conventional companies that create them. Or, we might simply say that boring is now cool.

Through much of the U.S. economy's amazingly durable 10-year growth streak, growth itself was almost routine. But as the most recent job report makes clear, if we could have just one of those quarter-million job growth reports of yesteryear we would practically kiss the ground. The solid and ordinary sectors of the economy are simply not producing the kind of pace in new hires that we've come to expect from a healthy economy.

The good news in the Bureau of Labor Statistics' June report on employment and unemployment is that the rate of job creation in the U.S. economy has picked up noticeably. The bad news is that we are only treading water. The 36,000 monthly job gainreported for June is miniscule in an economy with more than 130 million payroll jobs. But its better than the 160,000 job per month losses the economy averaged over the twelve months of the recession up until February.

For some sectors of the economy, such as manufacturing, even a slowing in the rate of job loss is clearly good news. Indeed, the mere 24,000 jobs lost per month over the last three months in the nation's factories is much better than the 115,000 per month rate of payroll attrition averaged in the last 10 months of 2001. The relentless pressures of technology and trade have relegated manufacturing employers to be smaller players in overall job growth for much of the last two decades.

The bigger disappointments come from the non-manufacturing side of the economy, particularly in the diverse services industries. The first tentative steps toward recovery in the temporary help services component of the once-mightybusiness services industry petered out in June, according to the BLS. After more than half a decade of creating more than 800,000 jobs per year, this sensitive sector of the economy failed to build on the mere 125,000 increase in the year-to-date, remaining essentially unchanged in June.

In fact, outside of the giant health careindustry, which has marched to its own beat, the services-producing side of the U.S. economy is noticeably lethargic. Travel disruptions continue to hurt restaurants, tourism, and transportation, while the advertising slump and uncertain status of technology companies continue to exert a drag on hiring in those areas. Only healthy increases in health care services and government kept overall job growth in the black.

When it comes to job growth, the U.S. economy took a nap in the month of June. That's got to add extra concern to those who worry about how much longer consumer spending can continue to prop up growth on its own.

Link to this commentary: https://commentaries.cberdata.org/415/job-growth-would-be-a-refreshing-change-for-the-u-s-economy

Tags: jobs and employment


About the Author

Pat Barkey none@example.com

Patrick Barkey is director of the University of Montana Bureau of Business and Economic Research. He served previously as Director of the Bureau of Business Research (now the Center for Business and Economic Research) at Ball State University, overseeing and participating in a wide variety of projects in labor market research and state and regional economic policy issues. Note: The views expressed here are solely those of the author, and do not represent those of funders, associations, any entity of Ball State University, or its governing body.

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