U.S. Jobless Rate Falls to 29-Year Low
A strong economy helped push the nation’s unemployment rate in March to a 29-year low of 4.2% and nudged the jobless rate for traditionally disadvantaged groups such as Latinos and less-educated workers to record lows, the Labor Department said Friday.
Coming atop fresh signs that Americans are continuing to spend freely and that U.S. manufacturers hurt by the global financial crisis are staging a comeback, the latest employment report portrays an economy sailing forward with few of the bottlenecks and breakdowns that bring most booms to an end.
Analysts said the biggest surprise in the new snapshot of the nation’s jobs picture--an increase of only 46,000 payroll jobs rather than the expected 160,000--was largely the result of lousy March weather that shrank construction payrolls. They did not interpret it as a sign that the economy is stumbling.
But the modest rate of job growth could help steer the Federal Reserve away from the belief that only an increase in short-term interest rates could protect a feverishly growing economy from generating inflation. The Fed’s policymaking committee passed up a chance earlier this week to raise rates or signal its readiness to do so soon.
“In terms of overall activity, the report is a mixed bag,” said former Labor Secretary Robert B. Reich, now a professor at Brandeis University. “It shows the economy is still growing, which is good news for people who want jobs, but it may not be growing quite as fast as it was.”
The March jobless rate was the lowest since February 1970 and 0.2 percentage point below February’s 4.4% rate, according to the Bureau of Labor Statistics. About 5.8 million people who wanted jobs were without them during the month, down from February’s 6.1 million.
Analysts said the new rate is the latest evidence of the nation’s uncanny ability to put people to work.
“This economy continues to be very strong,” said Lynn Reaser, chief economist of Bank of America’s private bank in Jacksonville, Fla. “We’re still doing a great job at pulling people into this economy,” said Donald Ratajczak, chief of economic forecasting at Georgia State University.
The analysts cautioned against interpreting the new, lower rate as signaling the start of another downdraft in joblessness. That is because the recent decline was achieved largely by a drop in the number of people looking for work, not a jump in the number working. The nation’s labor force, which includes people who are working as well as those who are looking, shrank by 455,000 in March.
Even with the shrinkage, analysts said, both the new job numbers and recent reports on other key sectors of the economy showed continued robust growth during the first three months of 1999, despite troubles overseas and widespread predictions of slowing growth at home. They said the latest numbers illustrate anew the economy’s considerable capacity for drawing in additional workers, especially those at the bottom of the nation’s economic pile.
Recent signs of strength outside the job market include:
* A report that the National Assn. of Purchasing Management’s index of manufacturing activity rose to 54.3 in March from 52.4 in February, its third consecutive monthly rise and evidence, according to analysts, that the depressed manufacturing sector is making a comeback.
* Commerce Department statistics showing that personal income rose 0.5% in February, following a 0.6% rise in January, and that personal spending rose an even more substantial 0.7% in February, on top of a 0.4% increase in January. The combination, analysts said, shows that Americans are confident enough of their prospects to spend beyond their wages and salaries.
Analysts cited unemployment trends among traditionally disadvantaged groups as one of the brightest spots in the new jobs report.
Joblessness among Latinos dropped from 6.7% in February to 5.8% last month, the lowest rate since the government began calculating a separate rate for the group in 1973. Unemployment among another troubled group, workers without a high school degree, fell even more steeply, from 7.5% to 6.1%, the lowest since the government began keeping a separate rate for this group in 1992.
President Clinton sought to advertise these trends even as public attention remained fixed on the NATO bombing campaign against Yugoslavia. “These economic indicators . . . mean wider opportunity and a better chance for millions of Americans to have stronger families and give their children a better chance,” he told a White House news conference.
Labor Department officials attributed March’s smaller-than-expected job growth to the loss of jobs in several important sectors. Construction, which had been adding about 50,000 jobs a month, lost a seasonally adjusted 47,000.
Manufacturing, despite showing recent signs of life, shed 35,000 jobs, bringing its loss for the last year to 381,000. Mining, which includes the oil-drilling industry, lost 7,000 jobs, bringing its annual losses to 55,000.
Job growth in engineering and management services, computers, health care and education offset these losses.
Workers’ average hourly earnings climbed a modest 0.2%, or 3 cents, during the month to $13.09. Over the last year, hourly earnings have increased 3.6%.
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Jobless Rate Down
U.S. unemployment rate:
March 1999: 4.2%
Source: Labor Department
