Economic Recovery Still A Long Way Off

The unemployment rate grew in August from 9.5 percent to 9.6 percent. But that's mostly because 114,000 temporary Census jobs ended. The job decline is less than most economists expected as the private sector added 67,000 new jobs last month.

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ROBERT SIEGEL, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

MELISSA BLOCK, host:

I'm Melissa Block.

And we begin this hour with the monthly jobs report, out this morning. The government's numbers for August, unfortunately, pick up where the numbers for July and June left off. In short, that means another month of modest private-sector job growth more than offset by government job cuts. The unemployment rate rose slightly, to 9.6 percent.

President Obama spoke about the new numbers in a Rose Garden press conference.

President BARACK OBAMA: New figures show the economy produced 67,000 private-sector jobs in August, the eighth consecutive month of private job growth.

BLOCK: The president described it as positive news.

Pres. OBAMA: And it reflects the steps we've already taken to break the back of this recession. But it's not nearly good enough.

BLOCK: Not good enough. NPR's Tamara Keith explains why.

TAMARA KEITH: Since the start of the year, the private sector has created more than 700,000 jobs. Sounds pretty good, right?

Professor CARL VAN HORN (Public Policy, Rutgers University): It's about half what we need just to keep even.

KEITH: Carl Van Horn is a public policy professor at Rutgers, who specializes in workforce issues. Most economists say that to keep up with population growth, the economy needs to add about 150,000 jobs a month.

Prof. VAN HORN: When you have this deep of hole in the labor market, it's very hard to get back because if you just do the simple math, you would have to have months and months of job growth in the 300,000 to 500,000 people level.

KEITH: Or in other words, we have a long way to go. Van Horn recently completed a nationwide survey, and found three out of four Americans have either lost a job or have a close friend or family member who's lost a job. In Van Horn's case, his brother-in-law and a friend from college have both been out of work for months.

Prof. VAN HORN: The vast majority of us have been affected, and it means that we're very pessimistic about the economy for the near term.

KEITH: Which is not good for the economy.

Prof. VAN HORN: Exactly. It becomes a self-fulfilling prophecy.

KEITH: In St. Louis, Missouri, business owner Steve Schulte is watching the pessimism unfold in his sales figures.

Mr. STEVE SCHULTE (Owner, Porta-King Building Systems): There's got to be a demand for the products. There's got to be that consumer confidence - they're willing to start spending money in order to get the whole ball rolling.

KEITH: Schulte's business is called Porta-King Building Systems. They make modular rooms that are used in factories. When the nation's employment situation was at its worst, he had to lay off more than half of his employees. But then this spring, business picked up, and he was able to hire 20 people. Then, demand fell off a cliff. Now, he's talking about layoffs again.

Mr. SCHULTE: Here I am, in the midst of saying it's about time for me to start battening down the hatches again just because of the conditions that we're presently seeing.

KEITH: And with conditions like that, maybe it's not a surprise that Professor Van Horn's survey found most Americans think the economy is in recession, and still will be a year from now.

Economist Douglas Holtz-Eakin says the economic reality is only slightly more encouraging.

Mr. DOUGLAS HOLTZ-EAKIN (Economist): The right way to think about the U.S. economy at the moment is that it is growing. It's been growing for about a year. But it is growing at an anemic pace, and that every policy effort should be focused on raising the long-term growth rate of the U.S. economy.

KEITH: But for many members of Congress facing tough elections this fall, there is only the short term. President Obama plans to offer his own ideas for generating more job growth next week.

Tamara Keith, NPR News, Washington.

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