Jobs may appear first in construction, manufacturing, transportation

Glimmers of an economic recovery seem to be emerging, though older Americans may continue to feel the pain for months to come.

Economists say signs of a rebound are mounting, suggesting the recession may be close to bottoming out. But it could be another nine to 12 months, or longer, before widespread corporate hiring freezes are lifted and employers begin to fill vacant job slots.

Although the unemployment rate hit 8.9 percent in April, the highest level since 1983, companies have shed fewer jobs in recent months. About 539,000 jobs were lost in April, compared with nearly 700,000 in March.

“We’ve seen a slowing of downsizing. It’s not coming at the same pace that we were seeing before,” says John Challenger, chief executive at Challenger, Gray & Christmas Inc., a consulting firm in Chicago.

“Things are still tough out there, but we may have passed the bottom,” Challenger says. “There are still more people chasing fewer jobs, but it does feel to me that our out-of-work clients are finding and getting more interviews than they were from November to February. Countless clients had situations where they were in the running for a job but were told the job was put on hold and the company decided not to hire anybody. That was the story then.”

The employment picture may be opening up ever so slightly. Economists say employers are likely to begin hiring cautiously in the first half of next year, though the unemployment rate could still continue to climb. After the recession that lasted from March to November 2001, the national unemployment rate continued to rise and didn’t fall back to its November 2001 level until July 2004, according to the Bureau of Labor Statistics.

Not all recessions have the same outcome, however. In the downturn that began in July 1981 and ended in November 1982, the unemployment rate began to decline just two months later, in January 1983, BLS data show.

Regardless of the economic climate, finding a job tends to be more of an uphill battle for older workers. Challenger says it typically takes those 50-plus about four months to find work, compared with about three months for younger job seekers.

In a downturn, however, it takes both younger and older workers even longer to find a job. To help the unemployed get through the recession, President Barack Obama outlined steps last week that would allow them to pursue education and training and still retain their jobless benefits. Currently, people who are out of work and want to go back to school must give up their monthly unemployment checks.

Ken Goldstein, an economist at the Conference Board, a private group that publishes information on the marketplace, says lines at the local unemployment office may still be long, but the outlook for employment is much less negative now than it has been. He predicts that the recession will be officially declared over between October and next March.

When employers begin to hire again next spring or summer, he says, look to the construction and manufacturing industries, the transportation sector and to wholesale and retail jobs to open up the most. Jobs related to the new federal spending to build and repair roads and bridges, part of the $787 billion stimulus plan, could also provide up to 3.5 million people with work by the end of next year.

Aside from the employment picture easing, Andrew Policano, dean of the Paul Merage School of Business at the University of California at Irvine, says other economic indicators point to an end this year to the deepest recession in recent memory. He says banks have eased up on credit and lending practices, spurring modest consumer spending. He also says home buyers are taking advantage of low mortgage rates and declining values, leading to a reduction of record inventories from last July.

Higher than expected earnings on the part of some U.S. companies in recent weeks also added to the few bright spots in the economy. But he says a question mark going forward is whether consumer spending, which drives about two-thirds of the economy, will hold up.

“Consumer confidence for two months now has moved into positive territory,” he says. “Consumers usually are the drivers of a recovery, so when they’re looking more confident, you have hope that they’re feeling like they want to spend and getting into more normal kinds of behavior.”

Carole Fleck is a senior editor at AARP Bulletin.