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Bennett is defending jobless rate

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Deseret Morning News graphic

WASHINGTON — New Labor Department data show the nation's unemployment rate continued unchanged last month at 5.6 percent as the U.S. economy added a barely noticeable 21,000 new jobs in February — far short of the 125,000 jobs economists had been forecasting.

In Washington, D.C., congressional Democrats see that as a glass half empty, while Republicans say it is half full.

Leading the election-year defense of that news for Republicans and President Bush was Sen. Bob Bennett, R-Utah, chairman of Congress' Joint Economic Committee.

"We've now had six months of growth in employment," Bennett said as his panel received the monthly employment figures. "Other indicators show the overall economy continues its strong growth."

But Sen. Jack Reed, D-R.I., the ranking Senate Democrat on the committee, said, "This is a very disappointing report. . . . More than 8 million Americans remain unemployed — with nearly 2 million out of work for six months or more."

Bennett and Reed jousted about whether figures should be interpreted with gloom or optimism at the committee hearing, while Bureau of Labor Statistics Commissioner Kathleen Utgoff answered questions giving some support to the competing views.

Bennett said that while the 5.6 percent unemployment rate is the same as last month, that "is still well below its recent peak of 6.3 percent last June and remains below the average of each of the decades of the 1970s, '80s and '90s."

Reed, however, said, "A year ago, the administration estimated that nearly 2 million jobs would be added in the second half of 2003 — 510,000 of them due to the president's tax cuts. In fact, only 124,000 jobs were created during that period. We got the tax cuts but didn't get the jobs."

Utgoff conceded in response to a question from Reed that, "In the job market, it is a weak recovery" from the recent recession.

Bennett, however, said more jobs may have been created than the most-often-used study indicates. It surveys key large employers about how many workers they employ each month. That has been much lower recently than a separate survey asking heads of household how many people in their families have jobs.

The "household" survey shows 983,000 jobs were created during the past 12 months, or nearly nine times the 122,000 jobs that the "employer" survey says were created during the period. Bennett has said the difference may be that more people are now self-employed or working for small firms — jobs the other survey would miss.

But Reed said, and Utgoff verified, "We need 125,000 new jobs each month just to keep pace with the growing labor force." Both job growth rates reported are below that.

Bennett said worker production rates are very high — meaning fewer people produce more — which is typical of the early stages of a recession recovery. That tends to hold down the number of new jobs. But he said, and Utgoff verified, production rates tend to drop off over time — meaning a corresponding increase in jobs is likely soon.

However, Reed said that the average time required for an unemployed person to find a job is now the worst in 20 years. It averages 20.3 weeks, which Utgoff said is the highest since 1983. Reed also said that high-paying jobs seem to be vanishing, while new jobs tend to pay low wages.

But Bennett said the Bureau of Labor Statistics projects that many of the fastest growing jobs will pay above-average wages. Of the 30 fastest-growing jobs over the next decade, for example, 13 pay in the top 25 percent of wages and another 6 pay above-average wages, including 50 percent growth in computer industries by 2012.

Bennett told Utgoff, "As there are those whenever we refer to the service economy who give images of flipping hamburgers at McDonald's or greeting customers at Wal-Mart, it is good to have your information that suggests that is not the appropriate picture for the jobs in years to come."

E-mail: leed@dgsys.com