
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, August 7, 1993                   TAG: 9308070012
SECTION: BUSINESS                    PAGE: A-4   EDITION: METRO 
SOURCE: Knight-Ridder/Tribune
DATELINE: WASHINGTON                                LENGTH: Medium

MODEST JOB GROWTH CONTINUES

The drop in the July unemployment rate and the rise in payroll employment suggests the U.S. economy is continuing to expand at a modest pace, with no evidence of any major acceleration, economists said Friday.

The Labor Department reported Friday that July payroll employment rose 162,000, after posting a revised gain of 44,000 in June, originally reported up 13,000. In addition, Labor said the unemployment rate fell in July to 6.8 percent - its lowest rate since September 1991 - from 7.0 percent in June.

The employment gain was slightly larger than the increase of 150,000 expected by economists.

"This report is consistent with an economy growing at a 3 percent clip," said Kathleen Stephansen, money market economist with Donaldson, Lufkin & Jenrette.

Stuart Hoffman, chief economist for PNC Financial Corp., said the report is "totally in keeping with the same kind of slow growing economy we've experienced all year."

Analysts said the report suggests the Federal Reserve will be able to keep monetary policy unchanged a while longer.

Many analysts and the Clinton administration had been expecting the economy to show signs of strengthening in the second half after turning in weaker-than-expected growth in the first half.

But Friday's payroll jobs report, while better than the June gain, indicates "a continuation of the relatively slow growth that we've been experiencing, together with not much change in the inflation scenario," said Allan Leslie, chief economist at the Discount Corp.

Manufacturing employment fell in July by 13,000, after dropping 55,000 the month before, and the number of manufacturing jobs in July is down 104,000 from April.

Jay Woodworth, economist for Bankers Trust Co., said the continuing drop in manufacturing employment shows producers are persisting in their efforts to "trim costs and hold payroll down."

Private economists said their worry was the quality of the jobs being produced.

They noted that some of the biggest gains in July came in low-paying work, including at restaurants and at employment agencies that provide temporary office help.

Analysts agreed that Friday's report should allow the Fed to keep monetary policy unchanged in coming months, contrary to earlier financial market fears of an early move by the Fed to boost short- term interest rates.

In a second report Friday, the federal Reserve said that consumer borrowing for autos and other installment loans jumped by $7.67 billion in June, the biggest increase in almost six years.

However, private economists viewed the increase with a great amount of skepticism, saying the central bank has been struggling to correct problems with its credit survey over the past two months.

by CNB