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Job-loss spiral slowing

Sat., May 9, 2009

Ranks of long-term unemployed are still rising sharply, however

WASHINGTON – Friday’s better-than-expected employment report from the Labor Department gave another sign that the U.S. economy may be bottoming out, but the jump in the unemployment rate is a reminder for millions of Americans that the outlook for jobs will remain bleak for some time.

The pace of job losses eased in April, with employers shedding 539,000 jobs, bringing the total jobs lost since the recession began in December 2007 to more than 5.7 million. April’s employment numbers were better than expected by most mainstream economic forecasters, who’d projected upward of 620,000 lost jobs.

Even as those numbers were seen as trending positive, they were offset by the uptick of the unemployment rate to 8.9 percent, the highest level since 1983, from 8.5 percent in March.

“The job market is bad, but as bad as expected, and headed in the right direction. Monthly job losses averaged 700,000 in the first quarter and appear on track to lose (an average of) 500,000 in the second quarter,” said Mark Zandi, the chief economist for forecaster Moody’s “There will be another 2.5 million in job losses and unemployment will peak at 10 percent by this time next year.”

April’s net job loss total actually was somewhat misleading: Private-sector employment actually fell by 611,000 jobs, but government hiring, which added 66,000 jobs, mostly for the upcoming census, offset some of them.

Although April’s job numbers reflect a welcome slowing of the downturn, a deeper look suggests that it will be a long, hard climb back to full employment. The number of long-term unemployed – those out of work for 27 weeks or longer – continues to rise alarmingly.

Some 498,000 more Americans moved into the ranks of the long-term unemployed in April, the Bureau of Labor Statistics reported, bringing the total to 3.7 million. Of that large pool, some 2.4 million joined those ranks since the recession began in December 2007.

“It really points to the nation’s economic challenge, this big idled work force and most people have been out of work for a very long time,” said Andrew Stettner, the deputy director of the National Employment Law Project, an advocacy group that promotes expanded unemployment benefits. “It means they really haven’t been able to find anything. For many people it’s a mismatch between skills and (available) jobs. It’s going to take a really major approach to get these workers back to work.”

The long-term jobless now are more than 27 percent of all the unemployed, the highest ever since records began in 1948, Stettner said.

In response, President Barack Obama announced a plan Friday to help the unemployed enter college for retraining without losing unemployment benefits, which usually happens when they enter school. This plan will depend on state participation. Obama said he also wants colleges to consider using their federal Pell Grants to help unemployed workers retool for the new economy.

“The idea here is to fundamentally change our approach to unemployment in this country, so that it’s no longer just a time to look for a new job, but to prepare yourself for a better job,” Obama said, adding that a new Web site,, would be a resource for the unemployed to find out what options are available to them.


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