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KAI RYSSDAL: Yesterday, the Federal Reserve said it's still worried about inflation. Today, it was those retail sales numbers we started with and a report that the trade deficit's growing.

None of which is good news for the economy, which in turn isn't good news for people looking for jobs. The most recent unemployment report showed more than half a million people have simply left the workforce and that the ranks of discouraged job-seekers continues to grow. Marketplace's Hillary Wicai has our story.

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HILLARY WICAI: For nearly a decade, 48-year-old Teresa Gaylor worked in a manufacturing plant in North Carolina. She watched as younger people got promoted over her. They had computer skills she didn't have. Even many manufacturing jobs today require knowledge of spreadsheets and data entry.

TERESA GAYLOR: All of a sudden you're thrown in this group of people that have all this education and you're getting pushed, pushed, pushed out of your job. And that's difficult, it's hard to take. It's depressing. You don't understand why your years of experience don't speak for something.

Gaylor says she felt a layoff was imminent. She's witnessed cutbacks first-hand. In 2003, when the textile company Pillowtex closed, her community, Kannapolis, N.C., experienced the largest layoff in the state's history — 7,000 workers lost their jobs.

The federal government poured millions into the local community college system, but many of the new students didn't know how to use a computer and couldn't make it through those classes.

Ed Hosack lost his job at Pillowtex.

ED HOSACK: Many of the individuals who came out of the mill were very discouraged. They approached the community college, so maybe they took some of the courses and found themselves overwhelmed, and simply backed away — and in some ways, gave up.

The former general manager wanted to do something to help out the manufacturing workers in the area. So Hosack started LifeBuilder Ministries and opened a classroom to teach the most basic computer skills — like how to turn it on and use programs like Microsoft Word.

His classes quickly filled. Four years later, he's still getting some former Pillowtex employees, but now workers from other plants who've been laid off, or folks like Teresa Gaylor who feel a layoff coming — even retirees sign up.

Volunteer instructors ease the students through.

COMPUTER INSTRUCTOR: Now most of you know what this little guy's called, right? Mouse. Right. Why, because, I guess because it's got a tail.

Gaylor took the basic skills she learned and got an office assistant job at the local school district in January.

GAYLOR: I needed to know what the computer was capable of doing. I didn't even realize there was an undo button for mistakes. And I learned how to use that very well.

Software giant Microsoft estimates more than 77 percent of U.S. jobs will require some computer skills by 2010.

But the company also estimates about a third of all adults today don't have those skills. That's part of why Microsoft has donated $255 million to 800 community projects, like Lifebuilder.

Pamela Passman of Microsoft admits this grassroots idea is new to a company that's used to a high-volume, low-cost approach when tackling business problems.

PAMELA PASSMAN: So in many ways, it's a fairly inefficient way — because we're engaging one on one, we really want to be able to reach large segments of these populations. But the most impactful way we found to do it is to work with those organizations most critical in their communities.

It may not be efficient, but Former Lifebuilder students like Shirley Harkey say the classes make a next step seem possible.

SHIRLEY HARKEY: I had no confidence in me at all. I had lost that.

Now, she helps teach the Lifebuilder's computer classes, and is taking additional community college courses she hopes will help her get office work.

Teachers and students in the classes all say it's hard to put a value on the hope that's restored just by learning computer basics.

COMPUTER INSTRUCTOR: The on button is usually used to turn it on. However, you very rarely use that button to turn them off.

In Kannapolis, N.C., I'm Hillary Wicai for Marketplace.