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Saturday, Oct. 3, 1998
Jobless rate climbs to 4.6 percent
Increased blamed on global slump hitting U.S.
By DAVE SKIDMORE
Associated PressWASHINGTON -- The nation's unemployment rate rose to 4.6 percent in September as the impact of a global slump spread widely through the American economy and cut job growth to the slowest in nearly three years.
The seasonally adjusted jobless rate, up from 4.5 percent in the three previous months, was the highest in six months, the Labor Department said Friday. Unemployment hit a 28-year low of 4.3 percent this spring.
Employers added only 69,000 jobs to their payrolls last month, the weakest figure since a blizzard in the Northeast forced businesses to cut jobs in January 1996. And factory employment fell by 16,000, the fifth decline in six months.
Payrolls also declined at construction companies, reflecting the widening impact of the recessions overseas. And service businesses added only 24,000 jobs, the fewest since February 1992 when the economy was emerging from the last recession.
President Clinton noted that unemployment has remained below 5 percent for 15 consecutive months and said, ``The economy remains very solid.''
Still, Clinton said he would personally participate next Monday as finance ministers and central bankers from around the globe meet in Washington to discuss ways to restore world stability.
``We cannot remain an oasis of prosperity,'' Clinton said.
Economists said this month's report may mark the start of a steady deterioration, even though they acknowledged the job market's continued strength.
``Weakness is not isolated to manufacturing,'' said economist Sung Won Sohn of Norwest Corp. in Minneapolis. ``The unemployment rate probably will go up gradually. . . . A year from now we might see it around 5.3 percent.''
On Wall Street, stock prices at first extended the crushing losses of the past three days, but then recovered. The weaker-than-expected unemployment report revived hope that the Federal Reserve will soon follow this week's quarter-point cut in short-term interest rates.
Friday morning, the Dow Jones average of industrial stocks plunged 102 points, falling briefly below its lowest close of the year on Aug. 31. It bounced back, though, closing with a 152-point gain at 7,784.
Rep. Jim Saxton, R-N.J., and chairman of the Joint Economic Committee, said Fed policy-makers shouldn't wait until their next meeting on Nov. 17 to lower rates again.
``An expeditious Federal Reserve cut . . . could send an important signal to the U.S. and the world,'' Saxton said.
Separately, the Commerce Department said orders for factory goods rose 0.9 percent in August, reflecting a rebound in autos after the General Motors strikes and a surge in aircraft. Excluding transportation, orders fell 1.2 percent, the worst showing in three months.
The Asian recession has hurt U.S. manufacturers in two ways: It has slashed sales in one of their best export markets and, because of steep currency devaluations, it has forced them to compete against a flood of cheap imports.
Makers of industrial machinery and electronic equipment account for 40 percent of the 152,000 jobs lost in manufacturing since March, said Katharine G. Abraham, commissioner of the Bureau of Labor Statistics.
In another sign of softness, the average workweek fell to 34.4 hours from 34.6 hours in August.
``We are being nicked by global economic woes,'' said economist Oscar Gonzalez of John Hancock in Boston. ``This expansion may die a death of a thousand cuts.''
Average hourly earnings rose only 1 cent, to $12.86, but that followed a strong 6-cent gain in August. Wages were up 4 percent from a year earlier.
Labor markets still are strong by historical standards. The number of people working part time who would prefer to work full time stood at 3.4 million in September, down by 563,000 over the past year.
Last month's unemployment rate was 3.8 percent for men, 4 percent for women, 15.4 percent for teen-agers, 3.9 percent for whites, 9.2 percent for blacks, 7.4 percent for Hispanics, 1.6 percent for college graduates, 4.1 percent for high school graduates and 6.9 percent for high school dropouts.Post your comments about local news eventsFront Page || Main Index || News || Business || Texas || South Texas Outdoors || Birdwatching || Sports || Entertainment || Selena || Education || South Texas Attractions || World Wide Web