DATE: Saturday, September 6, 1997           TAG: 9709060342

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: ASSOCIATED PRESS 

DATELINE: WASHINGTON                        LENGTH:   49 lines

BEST OF TIMES FOR JOB SEEKERS JOBLESS RATE FOR BLACKS AT 23-YEAR LOW

The United Parcel Service strike cast a temporary shadow over the U.S. labor market in August, holding job growth to the slowest pace in nearly a year.

The unemployment rate inched to a seasonally adjusted 4.9 percent from a near 24-year low of 4.8 percent a month earlier, the Labor Department said Friday.

But the Bureau of Labor Statistics commissioner, Katharine G. Abraham, said the increase wasn't statistically significant, and other economists said conditions remain excellent for most job seekers. In fact, the jobless rate for blacks fell to the lowest level since 1974.

``For workers, this is still the best of times,'' said economist Mark Zandi of Regional Financial Associates in West Chester, Pa. ``It's a good time to be looking for a job and a good time to be working, because wages are starting to go up more quickly.''

Wall Street at first cheered, taking the report as a sign economic growth was moderating enough to avoid aggravating inflation and would allow the Federal Reserve to refrain from raising short-term interest rates.

``There's certainly nothing in this report that will cause the Fed to act,'' said economist Bruce Steinberg of Merrill Lynch. ``Inflation is going to be steady. I don't think it's going to pick up.''

But other analysts pointed to signs of strength in the report and predicted Fed policy-makers would increase short-term interest rates, if not at their Sept. 30 meeting,then at their subsequent meeting Nov. 12.

``The Fed's next move is to tighten, not to ease. The mid-November meeting looks like the likely time frame,'' said economist Everett M. Ehrlich, a former undersecretary of Commerce, now a consultant in Washington.

After initial gains, stocks and bonds retreated. The Dow Jones industrial average fell 44.83 points to close at 7,822.41. It had been down as much as 81 points, but a late-afternoon statement from Federal Reserve Chairman Alan Greenspan denying rumors he planned to resign helped cut the losses.

``These rumors are nonsense,'' Greenspan said in a statement released by central bank spokesman Bob Moore.

The Dow Jones industrial average rose 40 points after the denial.

The yield on the benchmark, 30-year Treasury bond, which moves in the opposite direction from prices, jumped to 6.64 percent from 6.60 percent.

Beset by backlogs, frustrated customers and worker defections, United Parcel Service is still struggling to rebound more than two weeks after its first nationwide strike.

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