Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, January 8, 1994 TAG: 9401080064
SECTION: BUSINESS PAGE: A-4 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
"Steady growth, not a boom, is what is implied by December's economic data," said John Silvia, chief economist for Kemper Financial Services of Chicago.
The Labor Department reported Friday that the December unemployment rate was 6.4 percent, the lowest since January 1991. It was a modest decline from a revised 6.5 percent in November.
The report also showed that nonfarm payrolls swelled by a seasonally adjusted 183,000, to 111 million. More than one-third of the new jobs - 68,000 - were in the service sector. More than half of those were temporary slots.
Economists said the report was indicative of a strong finish for 1993 and evidence of more moderate growth in the early months of this year.
Most analysts had predicted a December rate of 6.5 percent or 6.6 percent and were pleased with the lower figure.
But the number of new nonfarm jobs was smaller than the 220,000 most analysts were expecting. The November increase was 202,000.
The 183,000 gain is "not that weak a number," said Bruce Steinberg, senior economist with Merrill Lynch in New York. "It's roughly in line with what's been going on in all of 1993. I think this is actually consistent with the long-term job track we're on."
Stephen S. Roach, a senior economist with Morgan Stanley Co. in New York, said the report "confirms my own suspicions that after a very solid performance in the fourth quarter [of 1993] we'll have a growth rate in the first quarter of 1994 that's more sustainable. We've been growing excessively."
Economists say excessive growth fuels inflation and drives up interest rates.
One surprise was the drop of 1,000 jobs in the construction industry. Economists had expected modest improvement in that sector, resulting from a combination of increased housing starts and low interest rates.
But economists said they were not concerned. Steinberg said it was "just a rest" after gains in October and November.
Manufacturing showed a net increase of 2,000 jobs; economists had expected 10,000. The National Association of Manufacturers, calling the modest increase "the major disappointment" of the report, said its surveys showed that corporate downsizing "may still not be complete, and at best few new jobs are expected to be added."
Durable-goods producers were the only manufacturers increasing payrolls. The government said 11,000 jobs were added in the automobile industry and 7,000 in electronics manufacturing.
In line with analysts' expectations, 32,000 jobs were added in retail trade. Government employment grew by 36,000. There were further losses in defense-related industries and aircraft manufacturing. The finance industry added jobs for the fourth consecutive month, for a total of 51,000 since August.
The number of Americans still without jobs last month was 8.23 million, down 93,000 from November.
Americans continued to work long hours, with the average work week unchanged at 34.6 hours - the longest since World War II. Economists had expected that figure to begin edging down in December.
by CNB