Of all the terms describing the recovering economy -- slow, sluggish, struggling, anemic -- the one word that fits best is jobless. To be sure, jobs have and are being created, but not at a sufficient rate to make much of a dent in unemployment -- 14 million people out of work, of whom 8 million lost their jobs during the recession.
Overall, 737,000 jobs have been created since January, offering hope businesses were taking on more employees. That hope received a mind-numbing jolt June 3 when the Bureau of Labor Statistics reported that only 54,000 jobs were added to the labor force in May. That was well below Goldman Sachs economist' original forecast of 150,000 new jobs and their revised forecast of 100,000.
The dip in jobs creation came after a three-month stretch in which an average of 206,700 jobs were added monthly. The slowdown pushed the unemployment rate to 9.1 percent. For Hispanics, the unemployment rate was 11.9 percent. Down from 13.2 percent in November, but the highest since January's 11.9 percent.
The jobs picture leaves a less than rosy outlook for Hispanics. They took a substantial hit during the recession. According to the Labor Department's March 31 report, "The Hispanic Labor Force in the Recovery," the recession significantly decreased Hispanic employment in four key sectors: construction, manufacturing, financial activities, and professional and business services. These four sectors accounted for nearly 1.1 million jobs lost by Hispanic workers. Particularly brutal was the construction sector, where 1 in 4 workers is Hispanic.
To lower unemployment, Kiplinger reported in a May 21 economic outlook, GDP would need to grow at 4 percent for a full year. Even if growth reached 3.5 percent, it would take five to six years for the job market to normalize, Federal Reserve Chairman Ben Bernanke estimated. For the first quarter of 2011, GDP grew at an annual rate of 1.8 percent. Since January, the monthly average of jobs created has only been 147,700.
Where are those jobs coming from? Not in the construction sector. From January through May, only 7,000 jobs were created in this sector. Not in transportation and warehousing either. That sector lost 4,000 jobs since January.
IHS Global Insight, based in Englewood, Colo., offers economic and financial analysis, forecasting and market intelligence for 204 countries. Its chief United States economist, Nigel Gault, has called the manufacturing sector the economy's shining star. From January through April, the sector created 128,000 jobs. But May proved to be particularly cruel—the sector lost 5,000 jobs.
The sectors in which jobs seem to be created at a steady pace are health care and retail. From January through May, the health-care sector added 136,000 jobs and retail added 94,800 jobs. May did depress job creation in both sectors; health care added only 17,000 jobs compared to 37,000 in April and retail lost 8,500 jobs after adding 57,000 in April. While these gains are good news, both traditionally provide lower-paying jobs. For example, the Health Journal online reported that in 2006 the average salary for a dental assistant was $14.68 an hour. The Payscale website put the average hourly wage for a dental assistant in 2011 at $13.99. Retail workers, the Los Angeles Times reported May 30, averaged $7.57 an hour in April 2006. By April 2010, the average had dropped to $7.02.
The depressed job market is also reflected in the HispanicBusiness 500 directory. From a peak of 147,465 employees in 2006, the number of people employed by HispanicBusiness 500 companies has steadily declined. In 2010, the number had fallen to 114,690.
Hispanics made up 15 percent of the U.S. labor force in 2010, according to the Labor Department, but they also bear a disproportionate share of the unemployment burden, especially during the recession. The nation's unemployment rate peaked at 10.1 percent in October 2009. That month, the unemployment rate for Hispanics was 13.1 percent. While unemployment steadily decreased after October 2009, unemployment for Hispanics remained high. Not until November 2010, more than a year after the national rate peaked, did the Hispanic rate hit its high, 13.2 percent. Nationally, the unemployment rate dropped to 9.8 percent.
Since November, unemployment steadily fell, to 8.8 percent by March. It is too early to tell if an uptick to 9 percent in April and to 9.1 percent in May are aberrations or harbingers of further stagnant job growth. During that same period, Hispanic unemployment followed the same trend, from 13.2 percent in November to 11.3 percent in March, with bumps up to 11.8 percent in April and 11.9 percent in May.
The chief economist for IHS Global Insight, Nariman Behravesh, believes there might be a glimmer of hope on the horizon. Productivity in the first quarter grew at an annual rate of 1.8 percent, 0.2 percentage points up from the previously reported 1.6 percent.
Mr. Behravesh told Reuters business might be reaching the limits of what they can squeeze from their work force. "That is good news for employment growth."
But others disagree, citing what might be called a perfect storm to depress jobs growth—advances in technology, the changing nature of foreign competition and the huge debt burden at all levels left over from the recession.
From all sides, the unemployment problem seems to be one for which there is no quick, easy or agreed-upon solution. At the moment, the direction of jobs creation becomes a wait-and-see proposition. HispanicBusiness magazine will monitor the situation closely and report about developments on its website, HispanicBusiness.com, and with analyses in the pages of the magazine.
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