With Recovery Slow, Unemployment Likely to Drag On

(Oct. 23) -- The wave of mass layoffs that crested during the recession is gradually receding, and unemployment in many parts of the country is falling, if slowly.

But the tepid pace of recovery in the jobs market, amid churning labor turnover in many economic sectors, suggests the pain will linger for some time to come. Two reports out Friday from the Labor Department paint this picture in bold relief.

The first looks at mass layoffs, when a single company cuts 50 jobs or more in one action.

In September, U.S. employers engaged in a seasonally adjusted 1,486 rounds of mass layoffs, firing a total of 133,379 workers. They took place across the spectrum of the manufacturing and services industries, from transport-equipment makers to retailers, temp-service employers to hotels and restaurants. Federal, state and local governments were responsible for a good deal of mass layoffs as well, with teachers and temporary census workers bearing the brunt.

That sounds pretty bad, but it was the third consecutive month of decreasing mass-layoff events, down from 2,326 a year earlier, and marked the lowest mass-layoff level since April 2008. The tide of payroll slaughter reached its peak in March of last year.

The other report shows that in 23 states the unemployment rate declined in September, if not by much, while joblessness increased in 11 states. The unemployment rates of the other 16 states didn't change.

The year-to-year comparison is a little brighter, with 29 states showing a 12-month decline in unemployment and 16 states posting higher jobless rates.

Unemployment remains stubbornly high in the worst-hit parts of the country, especially Nevada, which has the highest rate at 14.4 percent -- and perhaps not coincidentally one of the most heated Senate races, between Majority Leader Harry Reid and a tea party favorite, Republican Sharron Angle. In California, the most populous state, 12.4 percent of the work force is without a job, and in Michigan, 13 percent of workers are jobless.

But more than half the states in September had unemployment levels lower than the painfully high national rate of 9.6 percent, and just over a third had rates that weren't appreciably different from the nation as a whole.

For much of the country, unemployment is getting better, but slowly, slowly.

It seems that the employment market is in stasis, creating over the long term about enough jobs to keep up with those being lost -- roughly 458,000 a week, according to the latest four-week moving average of jobless claims reported Thursday by the Labor Department. Economists generally hold that weekly claims for unemployment insurance must get closer to 300,000 to indicate the pace of hiring will make a difference.

And that makes for a difficult employment environment considering more than 8 million people lost their jobs during the recession, as President Barack Obama noted Thursday in trying to defend his record during a backyard meeting with voters in Seattle.

"Where the economy was shrinking by 6 percent when I took office, the economy's now growing again. Where we were losing 750,000 jobs a month, we've now seen nine consecutive months of private-sector job growth," he said." So we've made progress and we're moving in the right direction, but we've still got a lot of work to do."

With present economic conditions offering a less attractive picture, Obama this campaign season keeps making comparisons to the past. But he gave a more nuanced explanation during a similar backyard discussion a few weeks ago in Des Moines, Iowa.

At the end of the session, Obama took a question from Michael Amadeo, the pastor of Holy Trinity Catholic Church. "My question for you comes from a member of my congregation who is 55 years of age, has a wife, two children who are freshmen in high school," Amadeo said. " A year ago he lost his job in manufacturing. He's been unemployed now for a year plus. What will your economic policies do for him within the next year, and hopefully to be able to secure a job and have that American Dream again, which has now been lost?"

Obama didn't answer with a soundbite and took several minutes to respond.

Saying he gets letters from Americans telling similar stories all the time, he talked about programs his administration has pushed to get businesses to hire more, changes to the tax codes to spur more investment and how the Recovery Act stimulus enacted last year made such a big difference. He also blamed foreign trade, and jobs that have gone to China or elsewhere because the protections in free-trade deals might not have been enforced.

But, he added, "it turns out that a lot of manufacturing has declined, just because it's gotten so much more efficient."

Companies have automated their production, a phenomenon that accelerated during the recession as businesses sought to do more with less. Steel mills, for instance, now use one person and a computer in place of 10 workers.

And, Obama said, industries evolved, from labor-intensive large factories producing cars, for example, to many smaller plants turning out advanced, clean-energy batteries used in hybrid cars.

"That parishioner is going to need probably to update some of their skills, because as I said, the fact that they know manufacturing, they know machines and tools -- all that is going to be helpful, but they're also probably going to need to work a computer better," Obama said. "They're going to need to know how to diagnose a big, complicated system, looking at a flat screen inside the factory as opposed to tooling around and opening things up to see what's going on. And that may require some retraining."

Obama said he wants to set up programs that will provide temporary financial help for such workers while they get new training in their fields.