- WASHINGTON (UPI) -- Job prospects
are looking increasingly precarious, as the unemployment rate continues
to climb whilst the nation prepares for war against Iraq, lawmakers cautioned
Friday.
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- The U.S. Department of Labor reported Friday that February's
unemployment rate inched up to 5.8 percent, from 5.7 percent the previous
month.
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- "Our economy is not creating enough jobs ... Congress
should enact a plan that helps create jobs for those who are out of work
today and strengthens the economy for years to come," said Sen. Robert
Bennet, R-Utah, chairman of the Joint Economic Committee.
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- The Labor Department also reported that nonfarm payroll
employment fell by 308,000 from the previous month. Since its peak in March
2001, payroll employment has declined by 1.9 million. Meanwhile, jobs in
the service sector plunged by 204,000, while retail jobs dropped 92,000,
and manufacturing jobs declined by 53,000.
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- "Ugly! That's about the only way to describe the
February jobs report," said Joel Naroff, head of research group Naroff
Economic Advisors.
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- "We knew February would be a difficult month as
businesses and households began to hunker down for what looks like a war
with Iraq. But we are just beginning to get a picture of the extent of
the impact," he said.
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- One major concern is not only the number of people out
of work, but the length of time they remain unemployed until they find
a new job. Another is that the rate of job creation has decelerated over
the past two years. The two factors combined have been a key factor for
1.9 million of the total 8 million unemployed to be jobless for over 27
weeks.
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- And prospects are unlikely to be much better in the near
future.
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- The unemployment rate "is a lagging indicator...and
the (jobless) rate is expected to continue going up" even after the
economy turns around, said Kathleen Utgoff, the Bureau of Labor Statistics'
commissioner who testified before the joint economic committee.
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- Utgoff declined to predict how much higher the unemployment
rate could go, and for how long, but she pointed out that it was increasingly
difficult for those already out of work to find a new job quickly.
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- Both Republicans and Democrats rallied to have President
George W. Bush sign off on legislation early January to extend unemployment
benefits, given the continued weakness in the U.S. economy. The $7.2 billion
bill ensured that those who exhausted their 26 weeks of state aid could
file for an additional 13 weeks of government assistance.
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- Many lawmakers, however, are worried that the extension
is not enough, given that growth prospects are likely to get worse, at
least in the near-term, should U.S. troops attack Iraq, thus keeping a
lid on capital expenditure.
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- And while some White House officials have argued that
the severe winter weather this year was one key cause of the continued
weakness in the U.S. economy, the BLS's Utgoff dismissed such seasonal
factors leading to an uptick in the jobless rate.
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- "The snow (that hit the East Coast late February)...really
peaked on a Sunday," Utgoff said, adding that the jobless rate is
measured not by hours worked, but on actual days on the job. As a result,
even when the snow shut down businesses for a couple of days, it was unlikely
to have been a major factor in the increase in the jobless rate last month.
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- She said, however, that one reason for the 48,000 jobs
lost in the construction sector could be due to the weather, given that
many in that industry work on an hourly basis, and thus more prone to be
affected by seasonal factors.
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- Admittedly, creating jobs, as well as pushing through
tax cuts, has been one of President Bush's key mantras about getting the
U.S. economy back on track. But while the White House has put forward a
number of proposals to give tax breaks, it has so far been less able to
put forward plans to get people back to work.
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- "The president views today's unemployment report
as an important message to the Congress to keep busy and focus on the domestic
agenda, particularly the package of the president's economic stimulus plan
and job-creation plan. The president views this as an important matter
for Congress to take up no matter what the international situation may
be," White House spokesman Ari Fleischer said.
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- Some lawmakers, such as Sen. Jim Saxton, R-N.J., have
called for other means to stimulate economic growth, such as easing monetary
policy still further, despite the fact that the key federal funds target
rate is at its lowest level in over 40 years, at 1.25 percent.
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- "The pea-soup-fog of world events is now impacting
economic data," said Brian Westbury, chief economist at Griffin, Kubik,
Stephens, and Thompson, a Chicago-based financial advisory group.
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