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Payrolls tumble { January 10 2003 } Original Source Link: (May no longer be active)
http://www.washingtonpost.com/wp-dyn/articles/A37231-2003Jan10.htmlhttp://www.washingtonpost.com/wp-dyn/articles/A37231-2003Jan10.html
Payrolls Tumble in December
The Associated Press
Friday, January 10, 2003; 8:35 AM
The nation's unemployment rate held steady at 6 percent in December as a dismal holiday season for retailers and manufacturers cost over 101,000 jobs, the sharpest loss in 10 months.
The job cuts last month were widespread and followed a revised loss of 88,000 in November, the Labor Department said Friday. The report capped a gloomy year for jobseekers who saw the unemployment rate surge from 5.6 percent in January to close the year at 6 percent – matching an eight-year high.
The number of people unemployed 15 weeks or more climbed to 3.2 million in December.
The nation's retailers, which typically boost payrolls in December to handle the crunch of the holiday shopping season, shed 104,000 jobs. Factories slashed 65,000 jobs to end the year, and payrolls were down 592,000 positions from the previous year.
The struggling airline industry drove job losses in the transportation industry, which hemorrhaged 23,000 jobs last month.
The ailing economy has shown no consistent signs of a strong recovery. In fact, economists are bracing jobseekers for more bad news in the months ahead.
Facing the potential political damage, President Bush and a new Republican-controlled Congress quickly pushed through a federal extension of emergency unemployment benefits this week as lawmakers returned for a new session.
Bush also announced his plan to create "re-employment accounts" of up to $3,000 for jobless workers. The $3.6 billion program would help people pay for expenses such as child care, job training, transportation and moving expenses while looking for work.
Also, Bush unveiled a $670 billion program of tax cuts aimed at stimulating the economy, saying "too many of our citizens who want to work cannot find a job."
Congressional Democrats proposed their own package, saying the administration's plan is tilted too heavily toward the wealthy. Bush has denied that and said that some criticism of his program amounts to class warfare.
Although the economy has been recovering from the 2001 recession, its progress has been slow and uneven, with varying degrees of growth.
That climate and fears about a possible war with Iraq and concerns about tensions with North Korea are making companies wary of big commitments in capital investment and hiring – the main ingredients for a strong recovery.
With economists predicting only modest economic growth in the months ahead, the jobless rate could rise to 6.5 percent by the summer, analysts have said.
The holiday season turned out even worse than expected for most of the nation's retailers. Analysts and retailers attributed the weaker-than-expected performance to fewer shopping days, economic uncertainty and consumers' lack of must-buy items.
About the only bright spot in retail was furniture and home furnishings stores, which added 14,000 jobs last month. Consumers have taken advantage of the lowest interest rates in four decades to buy homes and refinance their mortgages, driving up spending on household items.
© 2003 The Associated Press
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