Sunday, December 29, 2002
Most economists don't expect a full recovery until the second half of 2003.
ASSOCIATED PRESS
It's a year later, and Mark Kulick is gradually pulling his life back together from the recession of 2001. But as with the economy, full recovery isn't coming easily.
Kulick, 45, laid off as a maintenance mechanic in the summer of 2001, enrolled in community college near his home in West Scranton, Pa., and is on track to get a degree in electrical engineering technology next spring. His confidence, though, remains shaky and job prospects uncertain.
"I feel I'm able to cope right now," he said. "But I don't think I'll be able to gain any kind of strength until I'm permanently employed."
The story is much the same for the U.S. economy. After being socked by the potent combination of a recession and the Sept. 11 attacks in 2001, the world's leading economy climbed back up tentatively in 2002 but remained sluggish and shadowed by doubt at year's end.
Unemployment is back at an eight-year high, consumer confidence has dropped in the last six months and 401(k) statements are still painful to look at. Those "Dow 10,000" caps the New York Stock Exchange handed out in the golden investing days of 1999 aren't ready to come out of mothballs yet.
Took a pummeling
Although some economic signs are positive and a double-dip recession seems unlikely, most experts don't see a full-blown recovery before the second half of next year.
"We had almost everything you could hit us with between 2001 and 2002 -- Sept. 11, corporate malfeasance, the war on terrorism, Iraqnophobia, a dock strike," said Diane Swonk, chief economist for Chicago-based Bank One.
"The economy proved much more resilient than anybody thought, and prospects are better for more balanced growth next year. But it will probably be another six months before we start to feel a tingle about the economy again."
The tight job market has many on edge. The economy, while inching forward, isn't growing fast enough to create jobs needed to absorb a growing pool of people looking for work.
One year later
Kulick is one of several job-cut victims interviewed for an Associated Press story in December 2001 about the economic travails of that year. Contacted a year later to see how they were faring, several cited a common sentiment they'd felt during the difficult months of unemployment: fear.
For Kulick, it wasn't just about the money or having to scramble for temporary work while also maintaining a 3.9 grade-point average as a full-time college student. It was about having to redefine himself and invent a new calling in the second half of his working career, all in a changing economy.
"It was a very frightening experience," said the second-year student at Luzern County Community College in Nanticoke, Pa. "Once you put 25 years in the same job, you kind of feel your life is never going to change.
"Losing that security caused a lot of problems for us. I was thrown into a completely new environment, financially and socially. Working is a lot of who you are."
Kulick and his co-workers at Thompson Consumer Electronics used to joke that they'd end up flipping burgers at the fast-food place down the street if the economy went sour. Now, he said grimly, the joke has turned to reality for some of them.
The unemployment rate jumped back to 6 percent in November, delivering what one analyst called a "cold, hard slap in the face" about the economy, and is expected to rise as high as 6.5 percent. Concerned about a possible war with Iraq and their own sinking stock prices, corporations and businesses are showing extra caution in staffing and costs. Manufacturing remains in recession, with employment in the nation's factories continuing to decline.
'Lucky'
In the face of that bleak outlook, Michael Stanchina was thankful to land a job this fall as a tube bender at a tire plant in his hometown of Fairview, Mich.
Stanchina, 50, scoured a large area for work after losing his 28-year manufacturing job. It still took him a year to find a permanent job, and for less pay -- a year in which he fought forest fires, did road construction, spent months on unemployment and tried to stay positive.
"I consider myself lucky," he said. "I take one day at a time, and as long as I've got a job and paycheck after two weeks, and insurance, I'm happy. You feel good when you can make your bills and you've got a little money in your pocket."
That positive attitude among consumers has kept the economy from stalling. Consumer spending and borrowing, which accounts for two-thirds of all U.S. economic activity, has forestalled what could otherwise have been a slide back into recession.
Although the economy continues to struggle, "things definitely got better this year," said Mark Zandi of Economy.com, a West Chester, Pa., forecasting company. "Consumers have been pulling the economy along by buying lots of homes and cars."
The Federal Reserve has done its share to nurse things along, fueling the boom in home-buying and mortgage refinancing by cutting the key short-term interest rate to a 41-year low. The economy grew at a brisk annualized rate of 4 percent in the third quarter.