Job Creation Worst Since WW2

Economy races ahead, leaving jobs in the dust

The Congressional Budget Office projects the unemployment rate, which was 6.1% in August, will average 6.2% in 2004.

There is also a growing debate about whether the government's employment numbers fully capture what's happening. That's partly due to a widening gap between the Labor Department's monthly survey of about 60,000 households, which shows 1.4 million jobs have been created since November 2001, and its survey of 400,000 businesses, which indicates 1.1 million have been lost.

Labor Department officials Tuesday unveiled a report, based on data covering millions of private firms, that showed continued job loss through December 2002.

Mark Zandi, chief economist at Economy.com, says the situation might be as bad as the early 1990s, though the jobless rate is lower. Unemployment peaked at 7.8% in June 1992, compared with the current high of 6.4% in June 2003.

Zandi says the share of the working-age population that has a job or is looking for one has fallen by a percentage point in the past three years, the largest decline in labor force participation on record. Frustrated job seekers have given up, and foreign workers who came to the USA during the 1990s tech expansion have left. If participation had remained flat, the unemployment rate would be 7.8%.

Firms are expected to keep moving white-collar and factory jobs overseas. A Goldman Sachs study estimates 300,000 to 500,000 jobs were lost in the past three years to foreign relocations. As many as 6 million jobs could move overseas in the next decade.