Jobless Rate Holds Steady at 6.2%, Lowest in Decade

The nation’s unemployment rate held steady in May at 6.2%, but only 123,000 new payroll jobs were created, barely half the monthly average of the last three years, the Labor Department reported Friday.

The fact that the jobless rate has held firm for two months at the lowest level of the decade was a pleasant surprise to economists in light of other signs of weak economic growth. But the small rise in new jobs was taken as further evidence that the economy is slowing down after a strong first quarter in which the economy grew at a 4.3% annual rate.

“Overall, it points to a sluggish economy,” said Michael Penzer, an economist at Bank of America in San Francisco.

White House View

The White House focused on the bright side. The 6.2% jobless level is “good unemployment news on the eve of the economic summit” President Reagan will be attending with representatives of six other nations in Venice next week, presidential spokesman Marlin Fitzwater said.

Economists expressed puzzlement and skepticism over the unusually wide discrepancy between the Labor Department’s new jobs estimate and a Census Bureau report that calculated new jobs at more than 600,000. The Census Bureau number came from a household survey, while Labor’s 123,000 figure was based on a payroll count from employers, which is generally considered more reliable.

Janet L. Norwood, commissioner of the Bureau of Labor Statistics, suggested that the seasonal adjustment for the summer job market may have inflated the Census Bureau estimate. “Even though employment normally increases strongly between April and May as outdoor activity picks up and young people enter the labor market, the size of the April-to-May change is probably exaggerated,” Norwood said in presenting the report to Congress.

Civilians and Military

The 6.2% unemployment figure for May covers both civilians and military personnel living in the country. The civilian jobless rate was 6.3%, likewise a repeat of the April record and also the lowest level in seven years. Civilian unemployment in California jumped 0.3 points to 6.1%, as 45,000 additional unemployed were reported after seasonal adjustment.

Most of the employment growth was in service industries, with little in manufacturing. The Labor Department’s estimate of 316,000 new payroll jobs in April was revised downward to 280,000, another sign that the April-June quarter may be sluggish.

“Over the past three years the economy has been growing about 2.6% a year and employment has increased an average of 230,000 per month,” Penzer said. “May is definitely subpar, and if you average May with April, you get 202,000, so the data is consistent with an economy not doing very well.”

In the manufacturing sectors, layoffs in the inventory-heavy auto industry were offset by small employment increases in industries like lumber, textiles and apparel that are sensitive to trade trends.

Trade Deficit Declines

Those increases reflect a national trade deficit that actually is beginning to decline, said Martin Mauro of the Merrill Lynch brokerage firm in New York.

Mauro also noted that employment in the “mining” sector, which includes oil and gas production, has increased every month this year, a strong indication that the depression in the energy industries that devastated the economies of Texas, Oklahoma and Louisiana last year has bottomed out.

Among subgroups in the population, unemployment was little changed from April to May. Among adult men, the rate remained at 5.5%, while the rate for adult women was down 0.1 point to 5.4%. Unemployment for all whites was 5.3%, down 0.1 point. Unemployment among blacks increased from 13.0% to 13.8%, closer to the 13.9% March level but well below January’s 14.3%. Among Latinos the rate was 8.7%, down from 9.2% in April.