WASHINGTON, (Reuters) – U.S. private employers have recorded 11 consecutive months of job gains, yet the number of people who are so discouraged that they have given up searching for work stands at an all-time high.
Friday’s employment report is expected to show the pace of payroll growth accelerated last month after a disappointing showing in November. However, consumers’ assessment of the job market deteriorated in December, according to the Conference Board’s latest consumer confidence survey.
This disconnect is symptomatic of the state of the labor market. Yes, it is recovering, but at a pace that can hardly keep up with population growth, let alone quickly bring down the 9.8 percent unemployment rate.
Private employment increased by an average of 106,000 per month through November. At that rate, it would take more than 6 years just to replace the jobs lost during the latest recession.
There is reason to believe hiring will pick up in 2011.
Many economists have raised economic growth forecasts, in part because of a tax deal that keeps in place lower rates enacted under President George W. Bush, and planned job cuts are down 60 percent from a year ago.
However, that may not make job hunting much easier, said John Challenger, chief executive of job placement firm Challenger, Gray & Christmas in Chicago.
“The job market could be even more competitive as improving job prospects entice people who abandoned their job searches out of frustration to re-enter the labor pool,” he said.
The labor pool looks like it has sprung a leak. In a civilian labor force 154-million strong, only 64.5 percent were either working or looking for a job in November, a rate that matched October as the lowest since the early 1980s.
If workers come pouring back into the labor market more quickly than employers want to hire, the jobless rate will rise. The Labor Department counts people as unemployed only if they are actively looking for work, so those discouraged workers — nearly 1.3 million of them as of November — are excluded.
A look at the gender breakdown offers some signs that the dropout rate could stay high even if hiring improves.
Nearly two-thirds of the discouraged workers were men, perhaps a reflection of sharp declines in male-dominated industries such as construction and manufacturing, where jobs are expected to remain scarce.
Ethan Harris, an economist with Bank of America-Merrill Lynch, said the economic healing process will be faster for women than for men, in part because women are more likely to go to college and obtain the skills needed to find a job.
