Small Relief In Job Numbers

The January jobs report showed the economy losing 20,000 jobs, but there was some good news. The unemployment rate actually declined last month. Monthly job losses have declined sharply from a year ago, but employers are still very reluctant to hire additional workers.

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The nation's latest jobs report is better than just about any one had been expecting, but dig below the top line number and the message is mixed. The economy shed another 20,000 jobs last month and employers are still very reluctant to hire additional workers.

NPR's Tamara Keith has more.

TAMARA KEITH: President Barack Obama had just wrapped up a meeting with some Washington, D.C. area business owners when he gave his initial read on the unemployment report.

President BARACK OBAMA: Understanding that these numbers will continue to fluctuate for months to come, these are welcome if modest signs of progress along the road to recovery.

KEITH: Small businesses are the main targets of the president's latest proposals to boost job creation, which explains why this event was staged at the offices of a heating and air-conditioning contractor.

Pres. OBAMA: The true engine of job creation will always be businesses. What government can do is fuel that engine by giving entrepreneurs and companies the support to open their doors and to expand and to hire more workers.

KEITH: In the past two weeks, Mr. Obama has rolled out a series of proposals to goose employers into hiring again - a $5,000 tax credit for each new hire, increased limits for small business loans, and yesterday a plan to help companies refinance commercial real estate loans. But for Phil Kenny, that isn't enough. He owns Trucks Unique in Albuquerque, New Mexico and has to cut six people from his small staff in the last year and a half. Demand for customizing trucks isn't what it used to be.

Mr. PHIL KENNY (Owner, Trucks Unique): For those of us that have seen the downturn in the last couple of years, to offer us a tax credit for hiring somebody, you know, has no impact on our decision making. And aside from the fact that a lot of us don't have any taxes to pay to take the credit against.

KEITH: What is it that can take for you to hire again?

Mr. KENNY: It all depends on sales. Sales drive everything.

KEITH: And right now sales aren't nearly as good as he'd liked them to be.

Mr. AL ANGERSONY(ph): They basically have become what we call risk averse.

KEITH: Al Angorsony advised President Reagan on employment issues during the recession in the early 80s. He now runs a corporate turnaround firm and has been surveying small businesses about their hiring plans.

Mr. ANGERSONY: They're really watching their pennies, they're watching their cash. They're watching where they spend their money and they're very carefully accessing risk. And right now all of the factors that they assess are saying do nothing.

KEITH: So, the law firm of Delancy Hill in Miami may be an exception. The small general practice firm just hired a new attorney. Marlon Hill is a partner there.

Mr. MARLON HILL (Partner, Delancy Hill): We're taking a risk as well. I mean, we were kind of preparing for the recovery in advance.

KEITH: The downturn was rough for the firm. There were pay cuts and lots of lost business. Hill compares it to a hurricane.

Mr. HILL: You hear the winds howling, you make sure that the shutters are up, you make sure that there is food in the pantry, enough to last X number of months, and now we're taking off the shutters and we're going outside to enjoy some sunshine.

KEITH: The phones at the law firm have finally started ringing again. Though business is still way down from where it was.

Tamara Keith, NPR News, Washington.

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