Employment Rises but 6.9% Remain Jobless
The U.S. economy continued to plow ahead last month, creating a substantial number of new jobs, but the overall unemployment rate remained unchanged at 6.9% because of a large jump in the labor force, the Labor Department reported Friday.
In California, the civilian jobless rate increased to 6.6% from 6.4%.
Business added an estimated 298,000 new jobs in October--equal to the biggest monthly rise this year--as nonfarm employment reached another high of 100.7 million.
Economists viewed the job gains as a favorable sign for the economy, but some cautioned against expecting remarkable improvement, noting that many of the new jobs were part-time.
“This is yet another indication that the economy has been picking up recently,” said Irwin Kellner, chief economist at Manufacturers Hanover Bank in New York. “Any time you get a nearly 300,000 increase in jobs, it shows that business has confidence in the health of the economy.”
The job figures are closely followed by analysts and investors because they provide the first reliable clue to the performance of the economy in the most recent month. Reports on other indicators will be available in the next few weeks.
The employment gains were stronger than expected, helping to push up the value of the dollar in currency trading. Bond prices dropped as lingering hopes were dashed that the Federal Reserve would cut interest rates to stimulate economic growth.
Nevertheless, the job report overall was “less than awe-inspiring,” said Jerry Jasinowski, chief economist for the National Assn. of Manufacturers. “Nearly all were in services and a distressingly large share consisted of part-time workers, who are particularly vulnerable to layoffs in the event of a future downturn.”
About 60% of job growth was in part-time work, the report showed.
Workweek Declines
Analysts wondered also whether the modest 27,000 increase in manufacturing jobs might be providing a false signal of improvement in that sector of the economy, because the employment increase was outweighed by a slight decline in the average factory workweek.
As a result, many analysts believe that the surge in employment is unlikely to be translated into strong gains in other economic indicators.
Stephen Slifer of Shearson Lehman Bros. Inc. said he expected increases for October of just 0.2% in industrial production and 0.4% in personal income.
“You don’t get the sense that the economy is rapidly gathering momentum,” Slifer said.
Yet, even some of the more pessimistic analysts were heartened that the economy seems to be holding up. And they were also encouraged by an upward revision in an earlier estimate of weak job growth in September to a somewhat more robust 165,000.
110 Million Employed
Total civilian employment in the economy--as measured by the survey of about 60,000 households--rose by 349,000 to 110.2 million, leaving 8.2 million people unemployed.
But the civilian unemployment rate, which does not include members of the armed forces, remained stuck at 7% in October--a level that has barely budged for more than two years.
“There seems to be no getting away from the 7% unemployment rate,” AFL-CIO economist Henry Schechter complained.
Most of the additional jobs were taken by teen-agers and women who previously had not been counted as unemployed because they were not looking for work, the survey indicated. In October, an additional 121,000 teen-agers and 80,000 women joined the work force.
Gains in Large States
Unemployment fell in most of the large states surveyed by the Bureau of Labor Statistics, but it rose in California, jumped in Texas to 9.5% and climbed in New Jersey to 5.5%.
Job losses in the oil industry finally appeared to be coming to an end. Employment in that industry rose slightly to 424,000.
Much of the increase in employment occurred in business services and health care, along with a job gain of 69,000 among relatively low-paying retail trade firms.
Although there was no change in the 6.2% jobless rate for adult men, unemployment among teen-agers fell 1.1 percentage points to 17.6%.
