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Jobless Rate Stays at 7.1% but Women, Blacks Gain

Associated Press

The civilian unemployment rate remained unchanged at 7.1% in October, but a big jump in the number of people holding jobs brought cheers from the White House and predictions from some analysts Friday of stronger economic growth ahead.

The growth in payroll employment was about twice what had been expected as gains were registered both in service industries and the battered U.S. manufacturing sector, the Labor Department said.

The unemployment rate among blacks and women fell with the number of women holding jobs climbing to an all-time high. However, the unemployment rate among teen-agers shot upward.

In California the jobless rate was at 7.7%, up from 7.6% in September.

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The number of people working grew by 323,000 last month, but this was not enough to send the unemployment rate down because the number of people entering the work force was up by an even larger 341,000.

A separate survey of business payrolls showed a larger 414,000-person advance in employment, the biggest gain this year.

At the White House, presidential spokesman Larry Speakes said, “The rise in employment is a clear signal that rapid expansion is under way, adding yet another indicator of substantial, sustainable growth in the fourth quarter.”

While the Reagan Administration was optimistically predicting a rebound after a year of sub-par growth, private economists were divided.

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Some saw the employment gain as evidence of an upturn, while others said the country’s foreign trade problems will continue to hold back growth.

“This report sets the tone for a very bullish month. Factories are hiring back workers and they are increasing production,” said Michael Evans, head of a Washington economic consulting firm.

One reason for the optimism was a gain of 60,000 manufacturing jobs last month. Before the October improvement, the United States had lost 330,000 manufacturing jobs this year as a flood of cheap imports cut into domestic sales.

The slight upturn was taken by some analysts as a positive sign that domestic producers have seen the worst of their trade problems. However, total factory employment was still only 19.3 million in October, 1.8 million below the high reached in June, 1979.

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The service sector of the economy, which does not face import competition, posted a huge advance of 324,000 jobs last month, putting employment in this fast-growing sector at 73.5 million.

Some analysts warned that with America still running huge trade deficits, U.S. factories are likely to suffer more from the effects of an overvalued dollar before the trade picture is reversed.

Sen. William Proxmire (D-Wis)., a member of the Joint Economic Committee, predicted that unemployment will rise in coming months. He said record trade deficits and declines in housing starts and automobile sales are “all signs of an economy that seems to be going nowhere.”

David Berson, senior economist at Wharton Econometrics, also was pessimistic about the future. He predicted that unemployment will rise to around 7.3% in the first half of 1986 because of sub-par economic growth.

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While the 7.1% unemployment rate in October matched September, it was a slight deterioration from the 7% level reached in August, the lowest rate since President Reagan took office.

The unemployment report provided these details:

--Women enjoyed the biggest drop in unemployment during the month with the level declining to 6.4%, down from 6.8% in September. This boosted the percentage of adult women with jobs to 51.4%, an all-time high.

--Unemployment among teen-agers jumped to 20.1%, up from 17.8% in September.

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--Unemployment rates remained unchanged for whites at 6.1%, and for adult men at 6%.

--Unemployment among blacks dropped to 15%, down from 15.3%.

--Unemployment among Latinos climbed to 11.3%, up from 10.4%.


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