Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, February 6, 1993 TAG: 9302060134
SECTION: BUSINESS PAGE: A-6 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
JOBLESS RATE FALLS . . .
The unemployment rate dropped to 7.1 percent last month, the lowest in a year, the government reported Friday. Most of the decline, however, occurred not because people found jobs but because they quit looking.The rate has been 7.3 percent since November. Though there was an anemic increase in jobs last month, the main reason the rate fell was the departure of 508,000 people from the labor force.
Economists said they didn't think the lower unemployment rate would prompt President Clinton to abandon his plan to spend billions on public works projects.
"So far the story hasn't changed: The economy is generating very few jobs," said Bruce Steinberg, an economist at Merrill Lynch & Co. in New York.
Friday's was the last major economic report the White House will see before Clinton decides the exact size and makeup of his stimulus proposal, to be unveiled in his State of the Union speech on Feb. 17. It showed December employment gains in retailing, manufacturing and transportation, but declines in construction and some service industries.
The Labor Department said jobs overall rose 106,000 last month, the biggest increase in six months. In this stage of a typical recovery, the economy adds jobs at a rate of 200,000 to 300,000 a month.
"Until new data is available, the jury remains out on whether employment is increasing rapidly enough to sustain the recovery," said Jerry Jasinowski, president of the National Association of Manufacturers.
But John Albertine, head of an economic forecasting firm that bears his name, said "the recovery is beginning to bloom."
"We should expect to see this translate into new hiring in the coming months," Albertine said.
For January, manufacturing employment rose 34,000, reflecting a big increase in auto industry jobs. Factory employment has risen 50,000 over the past three months after having lost nearly 200,000 jobs from August through October.
Employment in retail trades also was up significantly in January, rising 69,000 despite continued layoffs at department stores. Since the start of last year, department stores have shed 83,000 jobs, including 5,000 last month.
The weakest area was construction, which lost 37,000 jobs as that industry continued to suffer from widespread overbuilding and high vacancy rates.
The service sector, about the only bright spot during this recovery, suffered a setback, losing 19,000 jobs despite modest pickups in the business and health-service industries.