U.S. Unemployment Down to 5% in March--Lowest in 15 Years

The nation’s unemployment rate dipped in March to 5%, the lowest rate in more than 15 years, despite a slowed rate in the creation of jobs, the government reported today.

The Labor Department said 180,000 new jobs were added to non-farm payrolls last month, the lowest figure since 154,000 in August, 1988, and down from a revised February figure of 280,000.

The department reported that 63% of the population had jobs last month--a new high.

The slower rate of job creation, affected somewhat by the Eastern Airlines strike, indicates some slowing in the economy. But there were signs of continued strength as well.

The number of factory jobs remained stable, and the average factory workweek fell slightly, by 0.2 hours to 40.9 hours. Average overtime was unchanged at 3.9 hours.

The 5% jobless rate, the lowest since December, 1973, when it was 4.9%, defied predictions that unemployment would edge up slightly from the February rate of 5.1%, which itself had matched a 15-year low.

Most in Service Sector

The bulk of the new job growth was in the service sector. Service industries alone added 110,000 jobs, with health services accounting for 55,000 new positions.

The job growth is tracked through a business survey that treats strikers as unemployed. Because of that about 25,000 striking Eastern Airlines workers were counted as being out of work, meaning that the new-job total would have been somewhat higher had it not been for the 1-month-old strike.

The strike does not affect the unemployment rate, however, because that data is compiled through a separate household survey that counts strikers as being employed.

In other areas, retail trade operations continued to add jobs, about 75,000 in March, and wholesale trade also showed growth.

But construction employment dropped for the second consecutive month, losing 50,000 jobs in a decline the Labor Department said was largely focused on residential building and appeared to be linked to the recent rise in interest rates.

There have been a number of recent signs of slowing economic growth, including sluggish auto and major retail sales and slumps in construction and the housing market. At the same time, however, there have been other indications of still-inflationary growth, including near-record factory use.

The dip in the unemployment rate is attributable to the addition of only 83,000 new people to the labor force--those looking for jobs. Total civilian employment reached 117.1 million last month, while the number of people unemployed--those looking for a job who could not find one--fell about 200,000 to 6.1 million, according to the household survey.

The unemployment rate dipped for all segments of the population last month except adult women, rising in that category from 4.5% in February to 4.6% in March. Among all adult men unemployment dipped to 4.2% in March from 4.5%.

Unemployment among all teen-agers dropped to 13.7% from 14.8%, but the jobless rate among black teen-agers was 31.6%, down from 32.4% in February.

The unemployment rate among black men fell to 9.8% from 10.5%. Among Latinos, the March unemployment rate was 6.5%, down from 6.8%.