Auto, Oil Layoffs Up Joblessness : Unemployment at 7.3% After Falling 2 Months in a Row

Layoffs in the auto and oil industries sent civilian unemployment up 0.2 percentage points to 7.3% in May, with all the increase occurring among adult men, the government reported today.

Unemployment overall increased by 212,000 people last month, raising the total number of jobless to 8.554 million despite an increase of nearly 200,000 service jobs, the Bureau of Labor Statistics said.

The May rate was the highest since February, and followed two straight months of slight declines. A total of 109.11 million people were employed last month, an increase of 218,000 new jobs since April. But the labor force grew 422,000, to 119.351 million, nearly double the number of new jobs created.

White House spokesman Larry Speakes said, “We expect to see continued employment gains in the 200,000-to-300,000 range over the entire second half of this year.

No Repeat Expected

“At the same time, we do not expect to see a repeat of the 422,000 workers added to the labor force; work force increases should drop to a more normal level of about 150,000,” Speakes said.

Manufacturing remained in its depression, losing another 40,000 jobs in May, raising to a total of 300,000 the number of factory jobs lost since August, 1984. About 15,000 of those jobs disappeared last month in the auto industry. Since early 1985, auto and truck manufacturing employment has dropped by 50,000.

The oil and gas industry continued to be the most dramatic area of declining employment, losing another 30,000 jobs in May in addition to the 70,000 jobs lost the first three months of this year in a reflection of falling oil prices worldwide.

“Since September of 1984, that industry has lost one-quarter of its work force,” BLS Commissioner Janet L. Norwood told the Joint Economic Committee of Congress.

Norwood said weakness in the oil industry has also affected other areas. “Oil field machinery manufacturing, for example, lost about a quarter of its jobs over the past year, much of that in the past few months,” she said.

Housing Increase

However, lower mortgage rates continued to spur increases in construction employment and new jobs in finance, insurance and real estate, reflecting the strong housing market.

Contractors hired 21,000 new construction workers last month, raising total employment in that industry to 4.99 million. In the last year, the economy has produced more than 300,000 new construction jobs. The finance, insurance and real estate sector hired 28,000 new employees in May.

The May figures also indicated that people are eating out more, with retail trade employment rising by 45,000, much of it in restaurants and bars.