THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Saturday, October 8, 1994 TAG: 9410080276
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: FROM WIRE REPORTS
DATELINE: WASHINGTON LENGTH: Short : 48 lines
Job creation in America tapered off in September even as the jobless rate fell to a four-year low of 5.9 percent, the government reported Friday.
Only 239,000 new jobs emerged during the month, short of the 254,000 analysts had forecast.
The shortfall heartened Wall Street, where traders pushed up stock and bond prices, figuring fewer jobs means the economy won't need to be slowed with higher interest rates. But economists differed on whether the Federal Reserve might push up short-term interest rates for a sixth time this year.
``On the surface it looks pretty strong, but underneath it represents pretty moderate job gains,'' said economist Sung Won Sohn of Norwest Corp. in Minneapolis.
The 5.9 percent unemployment rate, down from 6.1 percent in August, is the lowest since January's introduction of a new system for tallying the figure.
``While the decline in the unemployment rate to 5.9 percent could be seen as a sign of overheating, it may well be due to a mismeasurement instead,'' said Jerry Jasinowski, president of the National Association of Manufacturers.
Average hourly earnings, meanwhile, climbed to $11.16 in September from $11.13 in August.
Eugene Sherman, of the brokerage firm M.A. Shapiro, saw a threat of inflation in the increase.
``It's not a clear-cut case that inflation is accelerating,'' he said. ``But given the continuing vigor of the economy, the low rate of unemployment and the high rate of capacity utilization, it's inevitable that price increases will eventually show at the consumer level and among wages.''
Labor Secretary Robert Reich said the employment report provided ``neither cause for worry among bond traders on Wall Street nor concern among those who fear that the economy is slowing down. It's steady as you go.''
Corporate executives meeting in Williamsburg sounded the same theme. ``I don't think we're going to have lots of pressures on wages,'' said Lawrence Bossidy, chairman of AlliedSignal Inc. ``In industry, you're going to add jobs back very carefully, because you don't want to have to cut back later.''
KEYWORDS: UNEMPLOYMENT by CNB