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Economy poised to slowly put America back to work

Unemployment figures have reached the summit after a rough hike upward, and now have nowhere to go but down, economists say. The question is: Who will be doing the hiring?

In the coming quarter (April, May, and June), 21 percent of American companies plan to hire more people, says Joel Biller, an economist at Manpower Inc., the world's largest temporary-employment firm. ''That's the best figure for the second quarter since 1980,'' he adds. The figure came from Manpower's latest quarterly survey of 11,175 firms in the United States.

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''The big kick,'' says Geoffrey Greene, an economist at Wharton Econometrics in Philadelphia, ''is going to be provided by contract construction, in particular, home building.''

Durable-goods manufacturing will apparently be the second-largest hirer, especially in the industrial Midwest. ''Those areas that have been hardest hit will also be the first to benefit from recovery,'' Mr. Greene explains.

While it is important that people are being hired again, economists say, the hiring is not expected to have a major impact on overall unemployment, at least for a while.

''I think these figures only say that the unemployment picture is turning around. But I wouldn't infer too much optimism beyond that,'' comments Robert Gough, senior vice-president for US forecasting at Data Resources Inc.

February's unemployment figures, being released by the Department of Labor today, are expected to hover around the 10.4 percent rate recorded for January. (Another, recently adopted rate that includes the military is a slightly lower 10.2 percent.) ''At best, the (February) rate will fall a shade,'' says Allen Gutheim, senior economist at Wharton, but ''as the second quarter moves along, that rate will come down fairly consistently.'' Mr. Gutheim predicts 9.9 percent unemployment by the third quarter. The decline is slow because ''discouraged workers [not counted in the unemployment rate] will continually be reentering the labor force'' as they hear about recovery.

But in certain sectors of the economy, there is more excitement expressed over the improvement ahead. ''The surprising thing about the recovery in housing construction is how strong it is and how widespread it is,'' says Dr. Michael Sumichrast, chief economist of the National Association of Home Builders. He expects unemployment in overall construction, which hangs just under 20 percent now, to be down to 16 percent by midsummer.

The nature of rehiring in the construction business allows for more flexibility than a factory callback does, Dr. Sumichrast explains. ''It's not like manufacturing, where they announce 200 jobs and they get 500 people.'' In construction, there is little advertising; word of available jobs filters down through the network - contractors tell subcontractors, who round up workers.

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And there is room for workers without construction experience in this market, Dr. Sumichrast says. ''People start out as helpers, and eventually become tradesmen, particularly in carpentry.'' Also, unions are not as widespread in this industry as in manufacturing, which means it's not just senior workers who get first crack at the jobs.

The fastest-growing sector of construction is housing, and the South and West are the areas where a lot of this growth is happening. But Dr. Sumichrast warns that workers shouldn't expect the high growth in Texas, California, and Florida to continue. ''Texas is already experiencing problems,'' he says. Among other Northern towns, he talks up Chicago as ''a city that was hard hit, but is improving.''

In manufacturing, the sector expected to hire the most workers is the auto industry. Mr. Greene, at Wharton, sees 9.3 percent growth in that sector this year, which translates to about 60,000 jobs. In primary metals, which includes steel, he predicts only 2.1 percent growth, equivalent to about 60,000 jobs. Textiles and apparel will ''rebound with consumer spending,'' he says, and put 25,000 and 30,000 people, respectively, back to work.

Though an improvement, these jobs don't add up to a lot when you look at the size of these industries a few years ago, Mr. Greene says. ''It's distressing - it really shows how badly structural problems are affecting labor.''

Gordon Richards, director of economic analysis at the National Association of Manufacturers, adds, ''The recovery will be sufficiently erratic to not witness the same kinds of increases we've had in previous recoveries.'' Most of the coming jobs will apparently be callbacks, and workers will be returning to jobs or industries they are familiar with.

Construction and manufacturing may be hogging the spotlight in the near term, but in the long term, the broad category of services shows the most promise, economists say. Because services didn't suffer as many layoffs during the recession, they aren't springing back as noticeably as construction and manufacturing.

Other businesses planning to increase hiring in the next quarter are financial, insurance, and real estate firms, the Manpower survey says. The area showing the least promise is education.

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