Joblessness Dips to 5%, Lowest in 15 Years

Unemployment fell to 5.0% last month--the lowest rate in more than 15 years--even as the pace of job growth slowed, the government said Friday.

The report painted a picture of a moderating economy influenced heavily by a tight labor market. Nonfarm payroll jobs rose by 180,000, down 100,000 from February.

Another indication of moderation: The average manufacturing work week fell from 41.1 hours to February to 40.9 hours last month.

Amid the signs of moderation, however, were indications of increasing inflationary pressures on the economy:

- Average hourly earnings rose at a 5% annual rate.

- Construction jobs fell sharply. The drop was blamed on rising interest rates.

- A record 63% of the working-age population had jobs, but analysts took that as a sign of possible labor shortages down the road. Some 117.1 million Americans had jobs in March; just 6.1 million were out of work but looking.

The March unemployment rate was down from 5.1% in February and was the lowest since 4.9% in December 1973.

Some economists saw in Friday’s Labor Department report signs of the “stagflation” that gripped the economy as the decade began--slow economic growth in the face of moderate inflation.

“The economy is softer and softening but inflation now is being pushed up on the cost side by fewer workers and rising wages,” said Allen Sinai, chief economist of Boston Co. Economic Advisers Inc. “The report hints at an emerging ‘stagflation’ pattern.”

Wage Rise Called ‘Good News’

But another economist said the 5% annualized wage gain, despite its evidence as inflation pressures, was “probably good news.” Some analysts had expected the increase to be even greater given the tight labor market.

“In spite of the fact that the labor markets are extremely tight, we’re not seeing too much upward pressure on wages,” said analyst Dean William Dunkelberg of the Temple University School of Business.

Conservative economists called on the Federal Reserve Board to ease its credit reins to encourage growth but the consensus was that the central bank would neither loosen nor tighten its credit controls.

“This is a no-change-in-policy report,” Sinai said.

The bulk of the 180,000 new jobs were in service occupations, the fastest-growing segment of the economy. Service industries added 110,000 jobs, with health services accounting for 55,000 new positions. Retail and wholesale trade both showed job gains as well.

50,000 Construction Jobs Lost

On the other hand, construction employment dropped for the second consecutive month, losing 50,000 jobs largely in residential building. Labor Department analysts said that was a direct result of higher interest rates.

A separate unemployment rate that adds in members of the armed services stationed in the United States stood at 4.9% in March, down from 5.1% in February.

The civilian unemployment rate dipped for all segments of the population 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%.

The unemployment rate among black adult men fell to 9.8% from 10.5%; for black women it was 9.1%, down from 10.3%.

Among Latinos, the March unemployment rate was 6.5%, down from 6.8%.

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.