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Published: Monday, 2/8/2010

Economy is growing but creating few jobs

ASSOCIATED PRESS

WASHINGTON - Many jobless people have reached a conclusion that captures the depth of the unemployment crisis: Looking for a job is a waste of time.

The economy is growing. Yet it's creating few jobs. That's why in the past eight months, 1.8 million people without jobs left the labor market.

Many grew so frustrated by their failure to find a job that they quit looking for one.

The nation's unemployment rate is 9.7 percent.

But so many jobless people have quit looking that if they're combined with the number of part-time workers who would prefer to work full time, the so-called "underemployment" rate is 16.5 percent.

Their outsize numbers show that even though the economy is growing, the job market is stagnant.

Employers remain reluctant to hire.

The exodus did halt in January, when a net total of 111,000 people re-entered the job market.

But 661,000 had left in December. And the overall trend since spring has been people leaving the work force.

"It's very unusual," said Mark Zandi, chief economist at Moody's Economy.com. "At this point in the business cycle, we should be seeing some sort of labor force growth. Layoffs have abated, but there really has been no pickup in hiring."

Job creation was stronger early in previous recoveries.

And jobless people responded by streaming back into the labor force.

Even before the 1990-1991 and 2001 recessions ended, for instance, more people entered than left the job market, according to an analysis by Moody's Economy.com.

The work force did shrink after the severe 1981-1982 recession ended - but not as severely as it has this time, the analysis shows.

Some workers are concluding it's more practical to return to school, start a business, or care for their kids at home until the job market improves.

Those leaving the work force have been beaten down by the competition for few jobs.

A record 6.4 unemployed Americans, on average, are vying for each job opening, according to the most recent Labor Department data.

That's up from 1.7 jobless people per opening in December, 2007, when the recession began. And a record 6.3 million people have been jobless for at least six months.

Kelley Bryan is hoping to re-enter the job market next year, retrained for a new career.

She was laid off in February after more than 20 years as a secretary. Most recently, she worked at a public TV station.

Ms. Bryan spent three frustrating months looking for a similar job near her suburban St. Louis home.

Last spring, she decided to return to school. She landed a federal Pell Grant and enrolled at the L'Ecole Culinaire chef training school.

At 46, Ms. Bryan was surprised to find herself learning to make soup stocks and creme brulee with former autoworkers and other 40-somethings. They too are changing careers after losing jobs.

For many like Ms. Bryan, the struggle may not end once the job market improves.

As more Americans re-enter the work force, Mr. Zandi said competition will tighten.



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