Jobless Rate Up to 7.7% in State : Economy: California unemployment jumps as national figure falls slightly. Bush calls for Americans to ‘start moving and investing’ to spur sluggish recovery.

The unemployment rate in California soared to 7.7% in September, the government reported Friday, while the jobless rate nationally edged down slightly, reflecting a worsening economic situation in the state amid an anemic recovery nationwide.

The continued sluggishness nationally led President Bush to urge Americans during a press conference to “start moving and investing and see this economy take off some more” in an attempt to combat what he called a lack of confidence in the economy.

The President’s action reflected a growing worry within the Administration that the recovery is lagging behind expectations. Friday’s figures showed that the economy created only 24,000 new jobs in September, a lackluster performance for this stage of a recovery.

Only last week, the President called his top economic advisers together to urge government regulators to ease pressures on banks, which he contended have been too tight-fisted in making new loans.

Aides fear that, if the sluggishness continues, it could hurt Bush in the coming election campaign.

Friday’s report by the Labor Department showed that the national unemployment rate slid to 6.7% in September, from 6.8% the previous month and a peak of 7% in June. In all, about 8.4 million Americans were reported to be out of work.

The 7.7% rate recorded for California represented a sharp gain from a 7.3% unemployment rate the previous month, following a peak of 8.2% in June and a rate of 7.6% in July.

The September figures brought the number of people out of work in California to 1.153 million, up from 1.089 million during August. Analysts said that the state figures, which are based on a smaller sample, are more volatile and considered less reliable than national figures.

The economic news for Southern California was even worse, as the Los Angeles County jobless rate climbed to 9.3% in September, from 8.5% the previous month. The September rate was the highest since July, 1984.

Janet L. Norwood, commissioner of the Bureau of Labor Statistics, told Congress’ Joint Economic Committee that, although the national economy has not worsened since last spring, “we have yet to see any sustained signs of a rebound in the labor market.”

Bush insisted in his hastily called news conference that the economy is “on the right track.” But he went on to acknowledge that “all is not well,” and he said that he is deeply concerned about those who are out of work.

The President pledged once again to veto new Democrat-backed legislation to extend benefits to the unemployed, but he renewed his appeal to Congress to back a more modest Republican alternative.

The new attempt by Bush to demonstrate his sensitivity for domestic concerns served as a fresh indication that criticism about his apparent preoccupation with foreign affairs had struck an exposed nerve at the White House.

In an impromptu monologue at the end of the news conference, Bush sounded touchy as he complained that his previous appeals on domestic issues too often had gone unheard. He said that as President he bore a “disproportionate responsibility” for foreign policy, but added: “I just hope it doesn’t come out that this is all I am interested in, because it isn’t.”

The comments reflected Bush’s discontent after a month in which his efforts to turn attention to his “domestic agenda” often have been overshadowed by developments overseas or dismissed as mere electioneering. Because his remarks on the issues have often contained little that is new in content, they have attracted little attention from the press.

But, with the domestic economy still sluggish seven months after economists say the recovery began, Bush spoke with unusual frankness in conceding that Americans had not yet regained the optimistic outlook needed to spur increases in jobs and production.

“What the economy needs is a shot of confidence,” Bush said. With some signs of recovery not borne out by a new appetite for goods, he said that he hopes to put an end to the “disconnect between the statistics and the order books.”

Despite Bush’s exhortations, the Administration’s ability to speed up the recovery is severely constrained by the budget deficit, which has prevented the White House from increasing federal spending to stimulate the economy.

As a result, Bush was cautious in his remarks Friday, warning, “I don’t want to be euphoric in my optimism.” He added: “I think it’s all right to try to instill confidence in the marketplace, but I don’t want to be unrealistic about it.”

In voicing concern for the unemployed while once again rejecting the congressional bill for jobless relief, Bush was forced to confront his limited room to maneuver.

Because that $8.6-billion legislation would break the deficit-reduction agreement that the White House and Congress reached last autumn, Bush said that he would have no option but to veto the package, which would extend benefits by as much as 20 weeks.

Current law provides for 26 weeks of jobless benefits. Under the legislation, which has been passed by both houses of Congress, extended benefits would be apportioned to the states on the basis of their unemployment rates, with Californians getting 13 additional weeks.

Bush said that he was committed instead to backing a $1.9-billion bill sponsored by Senate Minority Leader Bob Dole (R-Kan.) that would limit the extension to no more than 10 weeks. He said the fact that it would not add to taxpayers’ burdens means that it is “a bill that the President can sign.”

“When people are hurting, I want to do what I can to help,” Bush said. “But it doesn’t help to simply add more to an already intolerable deficit.”

Particularly discouraging to some economists was that the September report showed a decline in the number of jobs in the manufacturing industry, which fell by 22,000 over the month after increases in each of the two previous months.

Analysts said that the drop in manufacturing jobs reflected layoffs in the electronics, aircraft and food-processing industries. Until the September drop, the manufacturing sector had been the strongest segment of the economy.

At the same time, however, employment in service industries rose 76,000, the fifth consecutive month of gains. The number of jobs in retail trade rose by 35,000. But government payrolls shrank by 27,000 jobs.

The Labor Department’s report showed that the slight decrease in the unemployment rate nationally was spread throughout all sectors of the economy except for Latinos. The jobless rate among blacks fell to 12.1% in September, from 12.3% the month before.

But unemployment among Latinos rose to 11.1% in September, from 9.9% in August and 9.5% in July. The jobless rate among whites edged down to 6% in September, from 6.1% in August.

Allen Sinai, chief economist for The Boston Co., a New York investment firm, said the figures showed that the economy is in trouble. “This economy is not really recovering,” he said. “Manufacturing, the sector that seemed most promising . . . has a cloud over it.”

The sluggishness in the job market was reflected in quarterly figures published Friday on the number of so-called “discouraged workers” in the economy--those who have given up looking for jobs because they believe it is futile under current conditions.

According to Friday’s report, the number of discouraged workers swelled by 100,000 during the July-September period, rising to 1.1 million. And the number of people working part time who would prefer full-time work surged by nearly 500,000 in September.