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American Morning
Some Communities Hit Harder Than Others By Unemployment
Aired December 07, 2001 - 08:15 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA ZAHN, CNN ANCHOR: National employment figures for November will be out shortly. Forecasters predict the figures will show unemployment rising to about 5.6 percent from 5.4 percent. But those percentages don't really tell the story of what being unemployed can do to a family or, in one case, an entire community. Here is CNN's Brooks Jackson.
(BEGIN VIDEOTAPE)
BROOKS JACKSON, CNN CORRESPONDENT (voice-over): Hickory, North Carolina, where business is booming.
UNIDENTIFIED UNEMPLOYMENT OFFICE WORKER: What's your social security number?
JACKSON: Booming at the unemployment office.
UNIDENTIFIED MALE: Everywhere around here there's not really anything.
JACKSON: These skilled hands worked steadily for 50 years upholstering furniture, until now.
UNIDENTIFIED MALE: Worst I've ever had (ph) in my lifetime. I mean you know, in my lifetime, it's worst I've ever seen it really.
JACKSON: Last year there was a worker shortage here. This furniture company tried to hire an upholsterer, advertised in six newspapers, got not a single response.
Hickory went from boom to bust, even more dramatically than the rest of the country. A year and a half ago, unemployment was 1.7 percent, less than half the national average. But now at 7.1 percent, it's well above.
MARK VITNER, WACHOVIA SECURITIES: Certainly, it's spilling over into sales of single family homes. It's spilled over into retail sales, and it's impacting virtually every part of the economy here.
JACKSON: The numbers are not encouraging. State figures show retail sales in this area declining, running 2.3 percent below last year even before the shocks of September 11th. As elsewhere, old line manufacturing was ravished. Textile mills have been losing jobs for years. This furniture plant shut down in July. Two hundred seventy- seven jobs eliminated, and new economy jobs evaporated too. Roughly 1,000 jobs lost locally at this one fiber optic company alone, mostly through layoffs -- even strong companies are suffering.
ROBERT MARICICH, CENTURY FURNITURE INDUSTRIES: Our business has held up and as I say, it's really taken a dive since the unfortunate events of September 11th.
JACKSON: A year and a half ago, fewer than 3,000 persons were looking for work in the Hickory area -- now it's 13,000.
UNIDENTIFIED FEMALE: I love you. Bye.
JACKSON: Including Mary Alice Phillips, a divorced mother of two teenagers. Her part-time teaching job became her only job nearly three months ago when Corning Cable eliminated her position as a supervisor in customer service. After that, life changed.
MARY ALICE PHILLIPS, LAID-OFF WORKER: You watch what you buy in regards to groceries. You watch how frequently you go out. You definitely don't go out and go shopping. Christmas is a little tight.
JACKSON: And yet, surprisingly, optimism is everywhere.
(on camera): Where do you see yourself in six months?
PHILLIPS: With a job -- with a job and more income.
JACKSON (voice-over): New homes are still being built at a strong pace nationally and they have to be furnished eventually.
ROBERT MARICICH: There's just a pent-up demand. Furniture sales are going to spike up and they're going to spike you rather dramatically.
JACKSON: At the area's only big retail mall, they say things started looking up after Thanksgiving.
DANA ED, VALLEY HILLS MALL: We're trending positive compared to last year and monthly we're actually up.
JACKSON (on camera): But the stark reality remains, since March nearly a million jobs have been lost across the nation. Here as elsewhere they're hoping for a quick recovery starting early next year, but most economists predict hundreds of thousands more will lose work before the worst is over.
Brooks Jackson, CNN, Catawba County, North Carolina.
(END VIDEOTAPE)
ZAHN: And our old man Jack Cafferty joins us now. You know I've also found these unemployment numbers so clinical. You know they say they're going to jump from 5.4 percent to 5.6 percent, but it's not until you see the impact on these individual communities that you really understand the pain ...
(CROSSTALK)
ZAHN: And what these numbers mean.
JACK CAFFERTY, CNN ANCHOR: The definition between a recession and depression is recession is if my neighbor loses his job; a depression is if I lose my job.
ZAHN: Exactly.
CAFFERTY: A couple of things, though, about the unemployment numbers. They tend to be a lagging indicator. In the last recession in 1991, the unemployment rate in the country -- the percentage of people out of work continued to rise for a year after the economy had begun to recover. So it tends to be a bit of a lagging indicator and with some of the other signs around, that there is some -- there are pockets of strength here and there in the economy, unless we get a blowout number to the downside -- now last month in October they lost 415,000, I think, on payroll jobs.
A number like that would send the stock market over the edge today, I think. But if it comes in somewhere around the neighborhood that they expect, 185, 90,000 jobs and the unemployment rate ticks up to 5.6 percent, the market is likely to take that in stride. The other number that we ought to watch for is at 10:00 when we get consumer sentiment out of the University of Michigan -- find out if ...
(CROSSTALK)
ZAHN: You don't take that -- you don't take that survey very seriously.
CAFFERTY: I don't take any of it very seriously, but there are people surprisingly enough out there who do and they -- and they watch these consumer sentiment numbers to get an idea of whether people are going to go and spend money at the malls before Christmas. The retail sales has an impact on a lot of things. Consumer is two-thirds of the American economy and so if they're feeling good, they tend to spend more money and if they're not they don't, and that has huge implications for the GDP numbers and all that other stuff -- but I don't take any of it seriously.
ZAHN: I should say I didn't mean to demean that survey and yet you know it often contradicts other economic information ...
CAFFERTY: Oh absolutely.
(CROSSTALK)
CAFFERTY: And if you read all of this stuff, your teeth start to hurt -- because I -- and your eyes glaze over and you just want to hit yourself in the head with a hammer to get away from it, because it's just mind boggling.
ZAHN: And I'm so glad you get to do that 24 hours a day and not me. CAFFERTY: That's my ...
(CROSSTALK)
ZAHN: Witness protection.
CAFFERTY: Witness protection network -- CNNFN. They're thinking about ...
(CROSSTALK)
CAFFERTY: ... changing the name, did you know that?
(CROSSTALK)
ZAHN: To what?
CAFFERTY: They're going to call it CNNUFN for the unknown financial network.
ZAHN: Oh man, well do you hear from the suits when you say stuff like that? Are you trying to promote this network?
CAFFERTY: No, they -- you know -- you know what -- not even they watch CNNFN.
ZAHN: There you have it, Jack Cafferty, cutting straight to the chase. We're going to take a short break and we'll be right back.
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