JOBS: Unemployment Rate Edges Up to 7.1% in September : Jobless Rate Edges Up 0.1% in September
The nation’s civilian unemployment rate drifted up to 7.1% in September, the Labor Department reported Friday, another sign that the economy is growing far more slowly than the Reagan Administration had anticipated.
Total employment rose 372,000 to a record 107.5 million, while the jobless rate edged up from the August level of 7%, the low point in the 4 1/2 years of Ronald Reagan’s presidency. The total number of unemployed people rose by 147,000 to just under 8.3 million.
The manufacturing sector lost another 111,000 jobs in September, according to preliminary figures, bringing the number of people cut from factory payrolls to 340,000 so far this year.
Joblessness among blacks increased 174,000 to 15.3%, a 1.3 percentage point boost that returned black unemployment to the plateau on which it has been for most of 1985. The rate for black teen-agers, meanwhile, went up nearly four percentage points to 38.3%.
Service Jobs Strong
The Labor Department cautioned that job losses in manufacturing actually were lower than the figures suggest, and some economists predicted a rebound for manufacturing in October. In addition, September employment gains continued to be strong in the service sector of the economy, where 75% of the U.S. jobs are.
Nonetheless, the September data is “mediocre at best,” said Robert Ortner, chief economist at the Commerce Department.
“The economy obviously needs some more Wheaties,” said David Ernst, vice president of a consulting firm, Evans Economics Inc. The declining value of the dollar, which makes imports more expensive, should help U.S. manufacturing in the months ahead, Ernst said.
The Reagan Administration is sticking to its prediction that the economy will grow at an annual rate of 5% in the second half of the year, while most analysts outside the government predict growth in a range of 2% to, at most, 4%.
Three percent economic growth is generally regarded as the level needed to keep the jobless rate stable.
“The implication of these unemployment figures is that the economy is not yet rebounding from the summer doldrums,” said Norman Robertson, chief economist at Mellon National Bank in Pittsburgh. “We’re on a 2% growth track, maybe 2 1/2.” The recent estimate of third-quarter growth by the government was 2.8%.
One positive sign in September’s figures was the length of the average factory work week, which rose six minutes to 40.7 hours, the longest in more than a year.
A total of 205,000 new jobs were created in the service sector in September, with gains of 85,000 in health and business services, which include data processing and temporary help agencies. Construction has added 190,000 new jobs this year, while retail trade has contributed 450,000, and gains continued in both categories last month.
Payrolls Cut
However, machinery manufacturers and electrical and electronic equipment producers cut their payrolls by 45,000 people last month, continuing reductions that have totaled more than 150,000 so far this year.
“The question,” Robertson said, “is how long these gains in service employment can be sustained in the face of fairly widespread weakness in the goods-producing sector. At some point, there may be a spillover effect.”
Janet L. Norwood, commissioner of labor statistics, told a joint congressional economic committee that part of the 25,000 decline in auto employment in the manufacturing sector “resulted from strike activity and part from the changed patterns of retooling for new cars.”
An auto plant in Ohio was being struck last month. Auto companies now spread out throughout the year the traditional late summer plant shutdowns for model changeovers, which throws off the traditional seasonal adjustments the Labor Department makes to the unemployment figures.
On balance, Norwood said, “the September statistics indicate some improvement in the labor market,” despite “continued weakness in much of manufacturing.”
Joblessness among adult men last month was unchanged from August at 6% and among white workers the rate fell a tenth of a percentage point to 6.1%. However, unemployment was up a tenth of a point for adult women to 6.8% and up a tenth among Latinos to 10.4%. Joblessness rose 0.5 of a percentage point for teen-agers, to 17.8%.
