• by Paul Gough , March 8, 2004

Friday's disappointing numbers for February job creation weren't good news for the newspaper industry, which has been awaiting sustained employment growth before entering a true recovery.

Only 21,000 new jobs were created last month, according to preliminary data released Friday morning by the U.S. Department of Labor. That's well below the 125,000 new jobs that most economists had been expecting. It continues the so-called jobless recovery, which has kept millions of Americans miserable and threatens to become a major campaign issue in the presidential elections this November. And it also means that newspaper revenues will continue to underperform for at least the first half of the year, say some analysts.

Hundreds of millions of dollars in revenues have been lost by newspapers since the double-digit decline in employment classifieds since 2001. The industry had a high of $8.7 billion in employment-classified revenues in 2000, according to the Newspaper Association of America; that fell to $3.9 billlion in 2003. Help-wanted revenues have fallen from 17 percent of newspaper ad revenues in 2000 to just under 9 percent today.

In a report released around midday Friday after the Labor Department's numbers, Goldman Sachs analyst Peter P. Appert said help-wanted trends will remain not-so-hot in the near future.

"While very easy comparisons should allow for at least modest growth in help-wanted revenues in the first half of 2004, a meaningful reacceleration in help-wanted growth will require much stronger employment numbers than we are currently seeing," Appert wrote.

Goldman Sachs predicts a modest improvement in 2004 and 2005, with 10 percent growth each year to $4.7 billion in help-wanted revenues in 2005. That would still put it below 1995's $5 billion in help-wanted revenues.

Miles Groves, former economist at the Newspaper Association of America and a consultant outside Washington, D.C., noted that Friday's figures aren't the final word on February employment. They could be better than that--or they could be worse. Both December 2003 and January 2004 job-creation numbers were revised downward Friday.

But Groves said that he's discussed the situation with several newspapers, and found that there is some improvement in employment. He thinks that a pickup in newspaper help wanted would happen primarily in the second half of 2004.

One newspaper company hard hit by the decline in help wanted is Belo Corp., which owns the Dallas Morning News and Providence Journal, among other newspapers. Belo's help-wanted revenues have declined severely in the past several years, although the rest of the classified section has improved.

"I think we're hopeful--but we, like everyone, are waiting on a full economic recovery," said Scott Baradell, a spokesman at Belo. "We think overall as the job recovery begins in earnest, a significant portion of the employment business will return."

But echoing the line of many newspaper companies, Belo isn't putting a timeline on recovery.

"We just think it's too early to tell," Baradell said.