Job Growth Sluggish for 3rd Month : Economy: The private sector added only 10,000 positions in May. The government hired 147,000 temporaries for the census, but that barely put a dent in the unemployment rate.

The economy, stumbling for a third consecutive month, created a mere 10,000 private-sector jobs in May, the Labor Department reported Friday. But the unemployment rate fell to 5.3% from 5.4% amid slower growth in the labor force and government hiring of 147,000 census workers.

In California, unemployment was unchanged at 5.4%.

Nationwide, manufacturing industries lost jobs for the seventh time in nine months, while a slump in construction continued. Non-government services added 62,000 jobs, considerably fewer than the pace that has prevailed since the last recession ended more than seven years ago.

Economists interpreted the report as ominous confirmation of a slowing economy. But they found some comfort in an unexpected increase in overtime paid to metal and auto workers, a possible harbinger of increased industrial output.

“This is an increasingly stagnant economy, which could fall into recession on its own lack of momentum,” said Allen Sinai, an economist with the Boston Co.

Analysts had hoped that the employment report, the first hard economic data for May, would show improvement following a weak March and April. Job growth had surged in January and February, and the boom was attributed in part to unseasonably warm winter weather.

“It’s getting pretty rough out there,” said Michael Penzer, an economist with Bank of America in San Francisco. “Three bad months don’t look too good, and it can’t all be reaction to warm weather in January. We can only hope these employment figures understate the strength of the economy, just as the first-quarter numbers overstated it.”

Economic growth during the first quarter recently was revised downward to an anemic 1.3% annual rate, despite the strong job growth early in the year.

Last month’s weak private-sector job growth of 10,000 followed a decline of 126,000 in April and a gain of 11,000 in March, for a net loss of 105,000 the past three months. That contrasts sharply with private-sector job growth of 603,000 in January and February.

Unemployment, however, has hardly budged during the same period, remaining within a range of 5.2% to 5.4% since last December.

The stable unemployment rate is explained in part by Census Bureau hiring of some 325,000 temporary workers in recent months--147,000 in May. In fact, with government hiring included, total employment increased by 164,000 last month.

Another factor in the stable unemployment rate is the gradual passing of the Baby Boom generation from the ranks of new job seekers.

“The new job entrants are now born in 1970, one of the low-birth years of the Baby Bust generation,” said David Wyss of Data Resources Inc. in Lexington, Mass. “There is also a slowdown in the number of women entering the labor market--mostly because the women who intend to participate in it are already in it.”

Factory jobs fell by 35,000 last month, with manufacturers of non-durable items such as apparel, textile goods and food-processing products accounting for 22,000 of the total. Factory payrolls have declined in 12 of the past 13 months, for a combined loss of 310,000 jobs.

Construction employment declined by 20,000 in May, the government reported, reflecting continuing weakness in housing.

“There is still a recession in manufacturing, which has now also spread to construction,” First Boston’s Sinai said. “What is most disturbing over the past three months is a weakening in services: Retail trade, finances, insurance and real estate have all been flat for that time, so it appears the long period of slow or declining growth on the goods side is spilling over into services, which are caving in slowly.”

UNEMPLOYMENT: May, ‘90: 5.3%. April, ‘90: 5.4%. May, ‘89: 5.2%.