Business

Jobs still hard to find

The job market is thawing at a snail's pace, raising doubts about whether consumer spending will become vigorous enough to sustain an economic recovery anytime soon.

An index of economic indicators and a regional manufacturing report released Thursday raised some optimism. But an unexpected rise in first-time claims for unemployment aid signaled that jobless Americans are still having a hard time finding work

Americans may see little benefit from a recovery if jobs remain scarce and consumer spending stays too low to fuel a strong economic rebound.

"Consumer spending is going to have a very difficult time recovering with the labor market as weak as it is," said Joshua Shapiro, chief U.S. economist at MFR Inc.

Many analysts expect the economy to grow between 2 percent and 3 percent in the second half of this year, as businesses restock their shrunken stocks of goods. But spending is likely to remain subdued. And as a result, many of the same economists expect growth to slow in 2010.

Even when the downturn ends, "it's still going to feel like a recession to the average consumer, the average business," said Ken Goldstein, economist for the Conference Board, a private business research group.

Consumers have been hammered by job losses, declining wages and lost wealth. Home prices in many areas of the country have sunk in the past two years. Investments and savings have dwindled, too.

Some retailers that reported second-quarter earnings earlier this week managed to boost their bottom lines by slashing inventory and other costs. But their executives cautioned that shoppers likely will remain tightfisted.

The Labor Department said the number of new jobless claims rose to a seasonally adjusted 576,000 last week, from a revised figure of 561,000. Wall Street economists had expected a drop to 550,000.

The figures had been trending down, after remaining above 600,000 for most of this year. In a healthy economy, initial jobless claims tend to hover around 325,000 or below.

  Comments