Unemployment Holds Steady for 4th Month
The nation’s civilian and overall unemployment rates held steady in May for the fourth straight month, the longest stagnant period in at least 14 years, the Labor Department reported Friday.
The civilian rate was 7.3%; and the overall rate, which combines the 115.3-million-member civilian labor force with the roughly 1.7 million members of the armed forces stationed in the United States, was 7.2%.
Manufacturing employment fell by 28,000, the fifth straight monthly decline. Since the start of the year, 163,000 manufacturing jobs have been lost.
But the economy overall created 345,000 jobs in May, with virtually all the gain in the services sector. About 111,000 of those jobs were health- or business-related.
More Gains Expected
At the White House, spokesman Larry Speakes called the job-creation figure “a significant finding and . . . an indicator of continued solid gains in employment and growth in the overall economy.”
Economist Michael Evans called the gain in new jobs “very strong” and said it overshadows the drop in manufacturing employment.
Evans noted also that Friday’s report showed an increase in the length of the average factory workweek and said that that probably will keep the Federal Reserve Board from again lowering its interest rate on loans to banks as a spur to the economy.
He said that financial markets had been rife with rumors that the Fed might cut the loan rate, as it did several weeks ago, if a large drop in manufacturing employment was coupled with a drop in the length of the factory workweek.
At the same time, the overall unemployment rate among young men, traditionally one of the strongest labor pools for manufacturing, was up. The jobless rate for those 20 to 24 years old rose 1.2 percentage points to 12.5%.
And, for teen-agers, the rate rose to 18.9% from 17.7%, due primarily to rising joblessness among college-age youths.
A Labor Department check of records going back to 1971 showed no period when unemployment had stayed the same for four months running. However, department analysts say there have been numerous times in that period when the labor picture has been relatively stagnant.
Indeed, civilian joblessness has been moving in the narrow range of 7.1% to 7.5% for the last year.
The number of unemployed Americans totaled 8.4 million in May, the level that has held since February.
Construction employment rose by 30,000, but the weakest segments of manufacturing--electrical equipment and clothing--fell by 24,000.
After 30 months of the economic recovery, manufacturing has regained only about 60% of the jobs lost during the 1981-82 recession, Janet L. Norwood, the commissioner of labor statistics, said in congressional testimony Friday.
In fact, employment levels in six industries are below what they were during the recession. Those industries are steel, tobacco, textiles, chemicals, leather and petroleum and coal.
The predominant job growth during the recovery has been in service industries, Norwood noted. “Since May of last year, nearly nine out of every 10 new jobs have been in that sector,” she told the congressional Joint Economic Committee.
Friday’s report showed these unemployment rates for May:
--Adult men, 6.1%, down from 6.3%.
--Adult women, 6.9%, up from 6.8%.
--Teen-agers, 18.9%, up from 17.7%.
--Whites, 6.2%, down from 6.3%.
--Blacks, 15.6%, up from 15.3%.
--Hispanics, 10.7%, up from 10.3%.
The civilian unemployment rate hit a post-Depression peak of 10.7% in November, 1982. About 11.9 million persons were out of work at that time.
In the 30 months of recovery through May, the number of jobless has been cut by 3.5 million and the jobless rate has declined 3.4 percentage points.
In all, about 106.9 million civilians held jobs last month.
Some economists are concerned that manufacturing employment could drift downward even further in the next few months and that the jobless rate will continue to hang in a narrow range above 7%.
A 7%-plus unemployment figure at this stage in the economic recovery is high by historic standards.
The economy will continue to move sluggishly, which is likely to translate into an upward drift in the jobless rate in the coming months, Sandra Shaber, an analyst with Chase Econometrics in Bala-Cynwyd, Pa., said in advance of Friday’s report.
The economy is moving slowly enough “to indicate that we’re not going to see numbers (jobless rates) anywhere below 7% anytime this year,” said Donald Ratajczak, director of the economic forecasting project at Georgia State University.
The manufacturing outlook will improve later in 1985, said Alan Greenspan, president of the Townsend-Greenspan & Co. in New York.
Weakening of the strong dollar and lower interest rates “suggest that erosion in the manufacturing area . . . will start to reverse and manufacturing employment will tend to pick up, not immediately, but by the end of the year,” Greenspan said.
A strong dollar, which most analysts believe is a function of high interest rates and soaring federal budget deficits, makes foreign imports less expensive and U.S.-manufactured exports more expensive overseas.