U.S. Jobless Rate Drops but 38,000 Factory Jobs Vanish

The nation’s unemployment rate in September fell back to July’s level of 5.4% after rising for two straight months, but with the loss of 38,000 factory jobs in the meantime, the government reported today.

Fewer new jobs were created than expected--255,000, with 100,000 of them in education with the opening of the fall school term.

The jobless rate in August had been 5.6%.

Across private industry, the job gain was just 142,000. It was the second straight month of little expansion after average monthly increases of 300,000 over the first seven months of 1988, the Labor Department said.

Assembly-line manufacturing jobs fell 19,000 on top of a loss of 18,000 jobs in August. That reversed an upward trend that had persisted for 1 1/2 years. Oil and gas industry employment also fell for the second month in a row after edging up gradually across the previous 12 months.

Average Job Gain of 65,000

Together, those industries had averaged a monthly job gain of 65,000 from January through July.

Adult men accounted for nearly all the decline in the overall rate last month, with joblessness falling from 4.9% in August to 4.5% last month.

Except for Latinos, whose rate fell from 8.4% to 7.4%, there was little change among the various population groups tracked.

The September figures show that the number of unemployed Americans fell by 255,000 to 6.6 million.

The number of “discouraged workers,” those who have given up the hunt for a job in the belief that they could not find one, rose from 910,000 to 930,000 in the third quarter of 1988. More than half the discouraged workers were women and one-third were blacks.

Health Services Jobs

“Monthly increases in total payroll employment have slowed in the third quarter, averaging only a little more than 200,000 per month compared with 340,000 in the first half of the year,” said Janet L. Norwood, U.S. commissioner of labor statistics, in congressional testimony.

Excluding teachers and other government workers, health services were the biggest source of new jobs last month, with such payrolls growing by 62,000. In contrast, the government said, business services, one of the strongest job sources across the six-year expansion, showed little growth.

Wholesale trade added 25,000 jobs in September, continuing a pattern of consistent growth brought about largely through rising exports caused by the fallen value of the dollar.

On the eve of today’s report, economists said they had expected the rate to decline last month.

With only one more jobless rate to come before the Nov. 8 election, economists said they do not expect the reports for September and October to help Democratic presidential nominee Michael S. Dukakis. The October jobless figures will be reported only four days before the election.