Unemployment Down. Good News?

So unemployment is now down. Good news for American workers? Not necessarily:

Even though economic growth surged at a rapid annual rate of 7.2 percent in the third quarter of this year, business executives around the country say they are still cautious about expanding their work forces and building factories.

And a new economic study, prepared for the United States Conference of Mayors, concludes that wages are significantly lower in the service sectors that are adding jobs than in the manufacturing industries that have been losing jobs.

According to the study, prepared by the economic consulting firm Global Insight, the biggest job growth over the next two years will be in the areas of administration and support services, health care, travel and tourism.

The average wage in those sectors over the next two years is expected to be $36,000, the study concluded. By contrast, the average wage in manufacturing sectors that lost jobs is $43,000.

Individual companies also aren't as optimistic as the Administration:

The Union Pacific Corporation, the big freight rail company, is preparing for a year of strong growth. But although the company is hiring, it expects productivity gains to allow it to keep its overall work force around its current size of 46,300 people or somewhat fewer.

"We're going to handle more business with fewer people," said Jim Young, Union Pacific's chief financial officer.

In its regular survey last month of chief executives at large companies, the Business Roundtable found that 71 percent of the executives expect their sales to increase in 2004 but only 12 percent expect to expand their work forces.

"Productivity continues to astonish everybody," said Henry A. McKinnell, chief executive of Pfizer Inc., the pharmaceutical producer. While executives are far more optimistic about next year than they were just a few months ago, he said, their mood is still "not ebullient."

In themselves, the new job numbers are not that impressive. By comparison with the rebound in jobs after other recessions, including the so-called jobless recovery of 1991, the pace of job creation now remains anemic.

Happy days are here again.