THE VIRGINIAN-PILOT  
              Copyright (c) 1996, Landmark Communications, Inc.

DATE: Saturday, September 7, 1996           TAG: 9609070174
SECTION: FRONT                   PAGE: D1   EDITION: FINAL 
SOURCE: STAFF AND WIRE REPORT 
DATELINE: WASHINGTON                        LENGTH:   43 lines

JOBLESS RATE DIPS TO 5.1%, LOWEST SINCE MARCH 1989 VIRGINIA'S RATES SEEM TO FOLLOW NATIONAL TREND.

The nation's unemployment rate plunged to a seven-year low of 5.1 percent in August, the government said Friday in a report hailed by President Clinton on the campaign trail.

Economists said the drop, from 5.4 percent in July, and a jump in average hourly wages increase the chances that the Federal Reserve will raise interest rates to cool the economy.

August's jobless rate, the Labor Department said, was the lowest since March 1989, when it reached 5 percent early in the Bush administration. Except for that one month, the rate hasn't been lower since December 1973, nearly 23 years ago.

August unemployment figures for Virginia won't be released until later this month. But economist William F. Mezger, who tracks the commonwealth's jobless rate, wasn't surprised by the national trend.

``Normally, you tend to get your best unemployment rates into the last half of the year,'' Mezger saaid. ``Unemployment is - on a long-range term - going down both in the state and the nation'' because ``conditions are generally good in the country.''

Virginia's jobless rate has reached a five- or six-year low every month this year except July, Mezger said.

As evidence of these favorable economic conditions, spending across the country has increased. Consumer confidence has climbed. And conditions should improve as schools open, harvests are completed, retailers gear up for the holidays and construction work continues into the fall.

Labor Secretary Robert Reich beamed over a 6-cent increase, to $11.87, in the average hourly earnings of non-farm, non-supervisory workers. That followed a 2-cent drop in July and a record 10-cent gain in June.

The unemployment rate dip was particularly pronounced among workers age 20 to 24 - from 9.7 percent to 8.3 percent - and those 55 and older - from 3.8 percent to 3.1 percent. MEMO: Staff Writer Mylene Mangalindan contributed to this report.

KEYWORDS: JOBLESS RATE UNEMPLOYMENT RATE by CNB