Jobless Rate Drops .1% to 5.2% for July : 169,000 New Jobs Added Despite Slowing Economy

The nation’s unemployment rate fell one notch to 5.2% in July as businesses added 169,000 new jobs despite the slowing economy, the government reported today.

The Labor Department said the growth was again found predominantly in the service-producing sector of the economy, which added 140,000 of the new jobs.

The jobless rate declined from the 5.3% reported for June. The government also revised its figures on new jobs created in June to 250,000, up sharply from the 180,000 reported in July.

“We have a soft economy but one that appears to have been stronger in July than in May and June,” said chief economist Allen Sinai of Boston Co. Economic Advisers Inc. “This certainly should ease fears of imminent recession.”

Michael Boskin, the Bush Administration’s top economic adviser, said the report “suggests the economy is continuing to expand.” He said the July job growth brought to 20 million the number of new jobs created during the record long expansion, which began in late 1982.

Today’s report contained further evidence of persistent wage inflation.

Weekly Earnings Climb

The department said hourly earnings of production and nonsupervisory workers increased 0.8% in July--about twice the rate analysts had predicted--while average weekly earnings climbed by 1.7%. The jump in hourly earnings followed two months of modest increases.

Goods-producing industries added 29,000 new positions as construction posted a gain of 35,000 jobs, helping to offset a decline of more than 10,000 jobs in the auto industry.

Manufacturing posted a modest gain of 3,000 jobs in July after three months of declines, according to the Labor Department’s survey of business establishments.

In all, 117.4 million Americans were at work in non-farm jobs last month, the government said.

The average workweek for production and nonsupervisory employees in private industry increased by 0.3 hours to 34.9 hours. The factory workweek held steady at 41 hours and overtime in July averaged 3.9 hours a week, up from 3.8 hours in June, the Labor Department said.

The jump in hourly earnings brought average hourly pay in the private sector to $9.70 on a seasonally adjusted basis, up from $9.62 in June.

Weekly earnings rose to an average of $338.53 from the June average of $332.85.

Youth Force Expands

The government said the summer expansion of the youth labor force in the last four months has totaled about 3.1 million, about the same as recent years despite a significant drop in the youth population.

The unemployment rate fell in July despite a dip in the number of Americans at work from 117.5 million to 117.4 million. The rate fell because the 169,000 new jobs were created in a month in which the civilian labor force--the number of people who have jobs or are looking for them--fell by 146,000.

The 140,000 job growth in the service-producing sector came despite a 25,000 drop in the number of government jobs.