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Good News, Bad News for U.S. Job Market

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Good News, Bad News for U.S. Job Market

Economy

Good News, Bad News for U.S. Job Market

Good News, Bad News for U.S. Job Market

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The U.S. economy lost jobs for the first time in more than two years, according to a government report out Friday. But the loss was far less than economists had predicted. Some analysts see the number as relatively good news, given the toll Hurricane Katrina took on the Gulf Coast.

RENEE MONTAGNE, host:

Coming up in today's business segment, a drop in jobs. The US economy lost jobs for the first time in more than two years, according to a government report out this morning, but the loss amounted to only 35,000 jobs, far less than economists had predicted. In fact, some analysts are saying the relatively low number is good news, considering the toll Hurricane Katrina took on the Gulf Coast. NPR's Frank Langfitt is here in our studio.

And, Frank, it's sort of a--What?--good news/bad news story?

FRANK LANGFITT reporting:

Yeah, pretty much. You know, analysts had expected to lose maybe 150,000 jobs this month, and so I think they were quite surprised to see a relatively low number like 35,000. And what analysts are saying right now is this is a sign of a really strong labor market nationally and that the nation was able to absorb a lot of these losses. You know, over the last year, each month we've seen an average about 200,000 jobs created, and that really seems to have helped with what's happened with Katrina.

MONTAGNE: Well, you know, given the hundreds of thousands displaced from their homes and businesses, how did the government measure employment last month?

LANGFITT: Well, the Bureau of Labor Statistics measures jobs every month, and this was an unprecedented challenge for them because there were so many people displaced. So they set up a special sort of system. One of the things they did is they took a look--when they would get in touch with businesses, if there was no response, they would just zero them out and just assume that there were no jobs there. But then they went to check on the Web as well to see which businesses were still paying their workers, and that's one reason why we may not have seen such a big job loss as well in this case.

Analysts also say you need to take this report with a grain of salt. It was a difficult report to do. It also was taken in the middle of the month, so it may have missed some other numbers as well. And also the government didn't break out job losses from Katrina, so we're still really not quite sure of its impact.

MONTAGNE: Well, is that the possible bad news in the report, or does the report actually have some bad news?

LANGFITT: It does have some bad news. You know, a lot of people clearly lost jobs, as everyone knows. Tens, hundreds of thousands of people left the region, and some of them are still in shelters in Louisiana and Texas. And so what we did see is the unemployment rate did go up from 4.9 to 5.1 percent, and so we're definitely seeing some job losses. And what that may mean as well to some people, because the national economy's doing pretty well, more and more people may be looking for jobs because the labor market has been doing better in that nationwide.

MONTAGNE: NPR's Frank Langfitt, thanks very much for joining us.

LANGFITT: Happy to do it.

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