Jobless Rate Drops to 5.8% : Industrial Employment Continuing Its Comeback
The nation’s overall jobless rate dropped slightly in November to match its September level of 5.8%, the lowest this decade, as U.S. manufacturing employment continued a comeback driven by a yearlong rise in exports, the Labor Department reported Friday.
The creation of 275,000 new payroll jobs last month, about a third of them in goods-producing industries, was far better than most economists had predicted for the first monthly employment report after the October stock market crash.
But analysts noted that hiring usually depends on decisions made months ahead and warned that the Wall Street decline’s impact on the jobless rate would not show up until several months into next year--when many economists expect an economic slowdown, if not an outright recession.
Martin Mauro of Merrill Lynch in New York called the report “encouraging . . . better than expected” and said that “it mostly reflect ed the strong momentum in the economy before the market crash and also the normal hiring practices for this time of year.”
He added that “the healthy increase in almost all manufacturing industries tells us that there was good growth well into the fourth quarter,” enough so that, even if consumer spending slows down in the wake of the market crash, some of the slack can be made up by industries manufacturing goods for export. “Strength from manufacturing is likely to be sustained,” he said.
Jobs at ‘End of Chain’
“This doesn’t indicate much about the market collapse,” added Michael Penzer, senior economist for Bank of America in San Francisco. “That takes more time to show up: First, consumer confidence has to fall, then buying has to decline, leading to a drop in orders, slower production and, finally, layoffs. So employment is at the end of the chain.”
Penzer added, however, that the growth in manufacturing for export “should help cushion that.”
He predicted real economic growth at an annual rate as high as 3% for the October-December quarter, as industrial jobs lost to imports during the years of the strong dollar are gradually recaptured. Nearly 600,000 manufacturing jobs vanished between mid-1984 and mid-1986, he said, but nearly 400,000 new production jobs have been created since then.
Director Janet L. Norwood of the Bureau of Labor Statistics, presenting the November report Friday to the Joint Economic Committee on Capitol Hill, noted that about 300,000 factory jobs have been added since last June alone--a huge turnaround that has affected industries across the board. She noted that “nearly seven out of 10 industries added workers” in November.
‘Orders Are Backlogged’
“Manufacturers are hiring because orders are backlogged and their work forces were cut dramatically in recent years,” said Jerry J. Jasinowski, chief economist for the National Assn. of Manufacturers, who in the weeks since the October collapse on Wall Street has frequently canvassed member industries and has assembled unexpectedly optimistic anecdotal evidence that basic U.S. manufacturing industries are growing steadily.
“The decline in the dollar and the resulting improvements in trade have been a major stimulus to manufacturing employment,” Jasinowski said. “These employment gains are another sign of the comeback in manufacturing.”
In all, about 69,000 factory jobs were added in November.
Figures Based on Survey
Unemployment measured by the Labor Department’s seasonal adjustment of a monthly Census Bureau survey of about 60,000 households was 7.1 million in November, more than 1 million fewer than a year earlier. Total unemployment was a full percentage point lower than the 6.8% recorded in November, 1986.
By another measure, which excludes from the count members of the armed forces residing in the United States, November unemployment was 5.9%, compared to 6.9% a year ago. In California, civilian unemployment in November was 5.3%, down from 6% in October and 6.8% in November, 1986.
The percentage of the civilian population holding jobs in November was 61.9%, the highest ever, Norwood reported.
Rate for Men Drops
The jobless rate for adult men dropped to 5% from 5.1% but remained unchanged for women, at 5.2%. Teen-agers’ jobless rate fell to 16.8% from 17.4%.
The unemployment rate for whites dipped to 5.1% from 5.2%, but for blacks the rate rose 0.1 of a percentage point to 12.1%. Latinos suffered the biggest increase, up 0.8 of a percentage point to 9.1%.
