U.S. Recovery Has Failed to Pay Off in Job Market : Economy: Many companies are still scrambling to cuts costs in an effort to remain competitive.

The U.S. economy appears to be growing at a healthy pace, but the recovery has defiantly refused to provide the one thing the nation seeks most: a secure, expanding supply of good jobs.

The reasons for the situation are numerous, notably the scramble by U.S. companies to cut costs and remain competitive. However, economists say they are worried that layoffs could imperil the fledgling recovery early in the Clinton Administration.

The troubling paradox of layoffs amid growth has come into sharp focus in the last few days. The government reported Thursday that the economy expanded at a brisk 3.8% pace late last year, but at the same time, a Who’s Who of corporate America, including Sears Roebuck & Co., Boeing Co. and IBM Corp., continued to announce job cuts.

“It’s taken on a life of its own,” said Irwin L. Kellner, chief economist at Chemical Banking Corp., of the job-cutting vogue that has gripped many large firms. “It’s now the macho thing for employers to say they can do more with fewer people.”

Sluggish job markets are typical early on in recoveries as employers await convincing evidence that economy has genuinely turned around. But the current recovery, almost two years old, has proved to be different.

Most employers have stayed on the sidelines in response to pressures that range from heavy debt loads to bruising international competition to a new appreciation of the productivity gains that can come from squeezing their work force.

Taken together, these forces are exerting intense pressure on President Clinton to create new jobs, despite opposing pressure to cut the federal budget deficit.

“Nobody would disagree that companies should be as lean and mean and efficient as possible,” Kellner said. “But each company working in its own best interest hurts the national interest by preventing jobs growth.”

Statistics underscore the peculiarities of today’s employment picture. Since the national recovery began in April, 1991, payroll jobs have increased a paltry 0.3%. That contrasts with an average gain of 6.5% at the same stage of prior recoveries.

The national unemployment rate, meanwhile, has been stuck above 7%. In California, it is a more punishing 9.7%.

In light of such realities, analysts are asking whether current economic growth rates can be sustained.

“Either consumers are going to get panicked because of the job market and cut back their spending, or business is finally going to say: ‘We’re as lean and mean as we can be,’ ” said Daniel J. B. Mitchell, a labor economist at UCLA. “You can’t keep having no employment growth and 3.8% growth in the (gross domestic product.)”

While many experts blame the flat employment picture on long-brewing business trends rather than the recession, some maintain that the slump has indeed contributed to the problem.

The uneven nature of the recession and recovery--each rolling through some industries and geographic regions much more forcefully than others--may have reinforced employers’ usual anxieties about the state of the economy, inhibiting new hiring plans.

In addition, the slump may have intensified a “downsizing” trend already spreading through corporate America. Even in the 1980s, most new jobs came from dynamic, small employers, while their bloated counterparts often chose to cut back.

As business conditions deteriorated in the early 1990s, larger employers have accelerated their cuts. “Recessions matter,” Mitchell said. “They intensify problems that were already evident.”

The good news is that more efficient companies are better positioned to survive the competitive challenges of the future, analysts say. The weak job market also has helped restrain inflation, another factor that bodes well for the economy.

But the continuing news of layoffs also threatens to undermine the confidence of consumers, whose recent purchases have propelled economic growth. In that respect, economists say the employment picture poses a danger to the recovery.

A survey by California Job Journal late last year, for example, identified 75 companies that eliminated 60,822 jobs in the last three months of 1992--and anticipated eliminated 30,046 more layoffs early this year.

The firms included those in aerospace, retail, manufacturing, communications and entertainment, according to the Sacramento-based publication. “And the unfortunate reality is that most of these positions will not come back for years, if ever,” said publisher Kathy Masera.

The trend, which has unraveled a bond of trust that once existed between many employees and employers, worries many economists because of its potential effects on people’s overall confidence in the economy.

“To me, the state of the labor market drives things a whole lot more than people have recognized,” said James L. Medoff, a Harvard University economist who contends that the White House must find new ways to promote high-paying jobs to replace the ones that have been vanishing.

“I can promise you that if Clinton doesn’t generate some good jobs, he’s going to see that consumer confidence go right back down,” he said.