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Jobless Rate Held to 6.7%, 7-Year Low : Usual Employment Drop After Holidays Absent This Year

Associated Press

The economy created 375,000 to 450,000 jobs last month to keep the nation’s unemployment rate at 6.7%, its lowest in nearly seven years, the government said today.

The number of unemployed Americans, meanwhile, rose by 74,000 to 8,023,000 after dipping below 8 million for the first time since mid-1981.

The job gains almost mirrored a growth in the labor force of 450,000. In December, the labor force had dropped by 90,000 and the jobless rate fell 0.2 of a percentage point from November’s 6.9%.

The Labor Department said the normal seasonal decline in employment after the Christmas buying season did not develop this year. In fact, employment in retail stores and restaurants grew by 165,000 in January after seasonal adjustments.

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Holiday Cutbacks Smaller

“Because pre-Christmas hiring this season was less than in the past, post-holiday job cutbacks were smaller than usual,” the Bureau of Labor Statistics said.

Without the seasonal adjustment process, however, the bureau reported an actual drop of 650,000 in retail trade jobs.

Construction employment also declined less than in a normal January--by 225,000. After seasonal adjustments, that job total rose by 140,000.

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“Construction activity was more vigorous than usual, in part reflecting favorable weather conditions and a surge in building permits that occurred at the end of last year,” said Janet L. Norwood, the commissioner of labor statistics, in testimony before Congress.

Effect of Tax Law

Some analysts had predicted an unusually large decline in construction jobs as a result of changes in the tax law.

Manufacturers, meanwhile, added 3,000 jobs, seasonally adjusted, much fewer than the 41,000 December job gain, but still the fourth straight monthly increase.

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Those job gains came in the lumber, printing and chemical industries, offsetting losses in the metal, machinery, auto and electrical industries.

After retail trade, the largest job gain was posted by business and medical services, 115,000.

“The data for January show weakness in manufacturing, but strength elsewhere in the economy,” Norwood said.

Compared to 1973-75

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Comparing the current economic recovery after the 1981-82 recession to the same period following the 1973-75 recession, Norwood said the number of factory jobs created in the 1970s was more than double those of the current recovery.

Because most members of the baby boom generation entered the job market in the 1970s, the labor force growth in this decade has been much smaller, she said.

“The unemployment rate has come down somewhat more sharply in the current recovery, but remains a full percentage point higher than in May, 1979, the 50th month of recovery after the 1973-75 recession,” Norwood said.

60,000 Households Surveyed

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The bureau’s survey of nearly 60,000 households showed an employment growth of 375,000, bringing total employment to 111,011,000. A separate survey of 250,000 business payrolls showed employment growth of 450,000 after seasonal adjustments.

Among the various population groups, the Labor Department reported these unemployment rates:

--Whites, 5.9%, up from 5.8%.

--Blacks, 14.3%, up from 13.7%.

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--Adult men, unchanged at 6%.

--Adult women, unchanged at 5.9%.

--Teen-agers, 17.7%, up from 17.3%.


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