Saturday, March 8, 2003

Jobless rate rises to 5.8% in U.S.

February drop is biggest since Sept. 11 attacks

By John Byczkowski
The Cincinnati Enquirer

U.S. employers cut 308,000 jobs in February, the biggest loss of jobs since the Sept. 11 terrorist attacks, the Bureau of Labor Statistics reported Friday.

The unemployment rate rose to 5.8 percent, up slightly from January. Almost 8.5 million Americans are unemployed, up from about 6 million two years ago.

"It looks pretty dismal," economist Sung Won Sohn of Wells Fargo & Co. bank in Minneapolis said. Playing a part in the job losses was the threat of war with Iraq, a February snowstorm that shut down the East Coast and continued cost cutting by business, he said.

While figures for Ohio and Cincinnati won't be available until next week, local employment officials say the situation in Greater Cincinnati is better than nationally, but not by much. Sandy Vest, manager of the Ohio jobs office on Central Parkway downtown, said her office was very busy in December and January as people filed for unemployment benefits. Activity slowed in February, but that's because unemployment benefits began to run out for many.

"Jobs are tight," she said. "You're still going to have your fast-food jobs, but manufacturing jobs are hard to get right now. Companies seem to be afraid to spend a lot of extra money."

Job hunters echo employers' reluctance. Ronald Schneeman of Pleasant Ridge lost his job as a marketing manager in a November 2001 downsizing. He's working as an office temp at Cincinnati State college, making a third of what he says he needs. He's had to dip into his retirement savings to help make ends meet.

Interviews are hard to come by. He's been talking to several colleges about programming or communications jobs - partly out of choice, but partly because local businesses aren't hiring.

"When you're living off your IRAs, you can't be real choosy," he said.

"My original impression was a lot of that anxiety in the economy was because of the war situation. Now I'm wondering if it's going to be a whole lot more difficult to turn the economy around, with oil prices the way they are."

Job losses in February were spread broadly across the economy. Manufacturing lost 53,000 jobs, and construction lost 48,000 jobs. Jobs in services fell by 204,000 jobs, with the biggest losses coming in transportation, retailing, hotels and business services.

Unemployment was highest for teenagers (17.1 percent) and blacks (10.5 percent). White unemployment was 5.0 percent.

The pace of layoffs nationwide has accelerated since summer, said John Challenger, CEO of national outplacement firm Challenger, Gray & Christmas Inc. in Chicago

It now takes an unemployed person almost four months to find a new job, and 1.9 million Americans have been unemployed six months or longer.

"The economy is in the doldrums. Companies are not investing in new product development and overseas expansion," Challenger said.

Sohn, the economist, said positives aren't easy to find. "A lot of people have dropped out of the labor force, because they assume there are no jobs to be had. That's one of the reasons unemployment is low," he said. In past economic slowdowns, unemployment has climbed to 9 percent or more.

Consumer spending has held up, and consumers still have about $5 trillion in the bank. "That's ammunition" for an economic expansion, Sohn said.

And since unemployment in the Tristate isn't as deep as that nationally, the region doesn't have as far come back.

"This area of the Tristate is in much better shape than the rest of the country," said Bill Young, Northern Kentucky's field office manager for the state's Department of Employment Services. "We are anticipating growth in the area. There are some companies in the Northern Kentucky area that are looking to expand."


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