“With weak stock prices and corporate scandals damping companies’ hiring plans, the recovery is starting for workers to look as bad as, if not worse than, the “jobless recovery” of 1991-92,” writes Greg Ip in today’s The Wall Street Journal.

“The number of nonagricultural jobs rose just 36,000 in June from May, and the unemployment rate edged up to 5.9% from 5.8%, the Labor Department said Friday. Government statisticians once again revised down prior months’ levels of employment, revealing a job market far weaker than previously thought.”

“‘The economy is on the road to recovery [though] the recovery is a bit anemic,’ said Labor Secretary Elaine Chao. ‘The labor market lags behind changes in real economic activity.’”

“While the Labor Department regularly revises its payroll estimates, those revisions have been strikingly negative this year, with every month’s report being revised downward — often sharply. The agency originally said payrolls rose 66,000 in February, but now it says they fell 165,000. An originally reported gain of 58,000 jobs in March is now a loss of 5,000, and a gain of 43,000 in April is a loss of 21,000. May’s gains were revised down to 24,000 from 41,000.”

“A ‘benchmark’ revision a month ago also reduced employment throughout last year. Employment in November 2001 was 340,000 below original estimates.”

“As a result, employment now shows 13 consecutive monthly declines through April. That exceeds the 11 straight losses in 1990-1991, though those declines were steeper. Back then, job losses continued intermittently through 1991 and into early 1992. A similarly tough spell could be in store for workers now, with the recovery so far subpar and employers more determined than usual to boost output per employee rather than the number of employees.”

“Lois Orr, acting commissioner of the Bureau of Labor Statistics, said recent revisions haven’t been statistically significant, but she couldn’t explain why they have been overwhelmingly negative. Data compiled by the Federal Reserve Bank of Philadelphia show that in 1991, as the economy emerged from recession, early payroll revisions were alternately positive and negative, though benchmark revisions years later sharply lowered employment levels.”

“While job creation was stagnant last month, there were still signs in the jobs report that the economy is continuing to grow. The average work week rose to 34.3 hours from 34.2 hours, and in manufacturing it jumped to 41.1 from 40.9 hours. When firms see an increase in business but aren’t sure if it will last, they often boost the hours of current employees before hiring new ones, because it is easier to cut back hours later than to sack workers.”

“Temporary employment, another way for firms to raise output without adding to permanent payrolls, edged up by 9,000. Manufacturing payrolls fell 23,000, though that was one of the smallest declines in two years. In services, losses in retail trade were offset by gains in health care and government.”

“‘Businesses are hesitant to expand, due to concerns about the stock market and heightened uncertainty over the geopolitical outlook,’ Bank Credit Analyst, a financial-markets research firm, said in a report Friday. ‘The attack on accounting standards and concerns about re-regulation are additional factors keeping corporate executives from expanding.’”

“Long-distance phone company WorldCom Inc. announced 17,000 layoffs two weeks ago when it disclosed it had understated operating expenses by $3.8 billion. Electronic Data Systems Corp., a major supplier to WorldCom whose accounting has also come under scrutiny by investors, said last week it would lay off about 2,000 employees in response to sluggish demand for its computer services.”

“The weak job market doesn’t mean a shrinking economy because firms are squeezing increased production out of their current employees.”

“Merrill Lynch estimates that productivity, or output per hour worked, expanded at more than a 3% annual rate in the second quarter, down from the first quarter’s remarkable 8.4%, but still robust.”