U.S. Unemployment Down to 5.3% in May : Economy: Weak job growth continues for third straight month, Labor Department says.

From Associated Press

The nation's unemployment rate slipped to 5.3% in May as weak job growth continued for the third straight month, the government reported today.

The jobless rate in April was 5.4%. The nation's unemployment rate has been fluctuating close to 5.3% for more than a year.

The number of new jobs increased by 164,000, but that number was artificially bolstered by the federal government's hiring of 145,000 temporary census workers, the Labor Department said.

The 19,000 jobs created by the rest of the economy was far below private economists' estimates. They had expected non-government industries to add at least 125,000 new jobs in May.

The report shows that "the economy is weaker than most people have been willing to admit," said economist Cynthia Latta of DRI/McGraw-Hill. "We don't see it getting better very quickly."

Janet L. Norwood, commissioner of the Bureau of Labor Statistics, said that although "the private sector has been stagnant for the past three months," relatively slow growth of the labor force has minimized the impact on unemployment.

The civilian labor force, at about 125 million, has added about 600,000 workers since the first of the year, the agency said.

The economy added 700,000 new jobs in January and February, but since then just 264,000 new jobs have been created. Excluding government jobs, private payrolls actually fell by 105,000 jobs over the last three months, the government said.

The separate survey of business establishments, from which the job growth figure is derived, is often considered a more reliable indicator of economic activity than the household survey from which the overall unemployment rate is calculated.

Today's report showed that the nation's manufacturing sector, which has been in a slump for months, continued to falter as factory jobs fell by 35,000. It was the 13th time in 14 months that manufacturing jobs declined.

The Labor Department said that since reaching a post-recession peak in March, 1989, about 310,000 factory jobs have been lost. That includes 85,000 lost jobs in the electrical equipment industry and 55,000 lost auto jobs, the agency said.

Construction jobs fell by 20,000 in May, reflecting continued weakness in the housing market, the government said.

Meanwhile, the service sector, which has been carrying the economy, added 216,000 jobs, but that was an inflated figure because it included the census workers.

Aside from temporary government jobs in the service sector, health services added 47,000 jobs, wholesale trade added 16,000 jobs and business services added 15,000 jobs.

Labor costs, which have been surging up and are being blamed for worsening the nation's inflation problems, continued to increase, today's report showed.

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