Economy snaps hiring slump

The jobs market bounces back in October, creating 126,000 jobs and stirring hope the nation's unemployment woes are near an end.

[Times photo: Scott Keeler] Jobless since October 2001, Charlie Ruvolo of Clearwater went back to work on Monday.

The jobless recovery is over for Charlie Ruvolo.

After 105 weeks of unemployment, the 47-year-old Clearwater man went to work Monday in a newly created executive position at Kforce Inc. in Tampa.

Add Ruvolo's new position to more more than 126,000 jobs that were created nationwide in October, sparking hope that the nation's drought of jobs is a thing of the past.

Job growth in August and September was also stronger than the government had initially estimated, the Labor Department said Friday. Employment grew by 286,000 from August through October, making it the strongest job growth over three months since late 2000.

The national unemployment rate fell slightly in October, to 6 percent from 6.1 percent the month before.

Bill Cheney, chief economist at John Hancock Financial Services in Boston, said the October figures suggest the economy has reached a turning point.

"Today's employment report is just one month's report, but it's the one we've been waiting for, providing unambiguous good news about the labor market," he said. "Although we're not yet creating the 200,000 or so new jobs per month needed to steadily bring down the unemployment rate, I see no reason, barring a shock, why we shouldn't reach that point by next year."

Nationwide, October's job gains occurred mostly in the service sector, as companies added to their payrolls, apparently in response to the recent jump in household spending. Manufacturers, still struggling against foreign competition, cut jobs for the 39th consecutive month, but the loss was the smallest since the early months of the losing streak.

In Tampa, Carol Brinkley, deputy director of Tampa Bay Workforce Alliance, which serves Hillsborough County's unemployed, said she has seen more openings over the past two months in financial services, real estate sales, health care, food service and call centers.

Ablest Inc., a staffing company in Clearwater, reported an uptick in orders for light industrial workers, although information technology assignments are still scarce.

"We're not talking a big spike, but we definitely have seen improvement," said W. David Foster, Ablest's chief executive. "You just hope it won't get worse."

The jobs report offered political benefits for the White House, which has credited the three tax cuts passed since 2001 with softening the economic slump and has predicted that they would eventually lead to job growth.

"We're delighted," said N. Gregory Mankiw, chairman of President Bush's Council of Economic Advisers. "I think we'll see robust job growth going forward."

Others weren't as enthusiastic, saying payroll employment remains about 2.4-million below the level at the beginning of the slump in March 2001.

Rep. Pete Stark of California, the ranking Democrat on the Joint Economic Committee, said, "This level of job creation, while better than expected, is probably not strong enough to keep up with the growing labor force, let alone erase the enormous jobs deficit, any time soon. ... Unfortunately, we are still a long way from a robust jobs economy."

Jared Bernstein, senior economist with the Economic Policy Institute in Washington, D.C., said he's bullish on the news of job growth, but said unemployment is unlikely to drop dramatically. "I expect the labor force to start growing more quickly, with the return of folks who gave up looking when job prospects were dim," he said. "This dynamic means we will need even faster job growth to lower the unemployment rate."

Bernstein said three months of job gains don't translate into employers handing out bigger paychecks. Government data show hourly earnings are up 2.4 percent over the past year, only slightly ahead of inflation. It's the slowest yearly gain since August 1994.

"The persistently weak labor market has taken its toll on wage growth, and it takes a while to turn wages around either way," Bernstein said. "Until the gains of the growing economy show up in paychecks, the sustainability of this growth is in question."

Peter Contardo, who founded ProNet of Tampa Bay, a network of unemployed professionals, said he's hearing that members are finding jobs. While it's encouraging, he said few people are returning to their previous pay levels.

"The wages aren't there" compared to the past, he said. "And somebody who's been out of work 18 months is going to have a long way to go before they start spending like they were spending before. Spending from tax cuts and home refinancings are only going to get us so far."

Ruvolo, who was profiled by the St. Petersburg Times in October near the end of his long job search, said he smiled when his future boss at Kforce warned that the new job's pay might not meet his expectations.

"I'd been out of work since October 2001," said Ruvolo, who was preparing to sell his restored 1947 Ford to raise money when the job at Kforce, a staffing company, materialized.

"I almost feel like I just got out of school, I'm so excited. But I bring this whole wealth of information and experience. I wake up at 4 a.m. laughing, I'm so happy to have this job."

- Information from Times wires was used in this report. Kris Hundley can be reached at hundley@sptimes.com or 727 892-2996.

© 2006 • All Rights Reserved • Tampa Bay Times 490 First Avenue South • St. Petersburg, FL 33701 • 727-893-8111 Contact the Times | Privacy Policy Standard of Accuracy | Terms, Conditions & Copyright