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November Joblessness Dips to 6.9%; Little Change Seen

December 07, 1985|OSWALD JOHNSTON | Times Staff Writer

WASHINGTON — The nation's jobless rate edged downward 0.1 percentage point in November to 6.9%, the Labor Department reported Friday, bringing the unemployment rate back to its lowest point during the Reagan Administration.

Analysts said the shift was caused more by a slight drop of 92,000 in the nationwide labor force than by any dramatic development in a sluggishly growing economy. About 8.1 million Americans remained out of work, while total employment reached a record 109.6 million.

Overall unemployment has hovered near 7% since last summer, and economists said they expected several more months of little change. In August, joblessness stood at 6.9%--a mark it has hit several times since President Reagan first took office.

Civilian unemployment, which excludes members of the armed forces serving in the United States, fell slightly to 7%. In California, civilian joblessness plunged to 6.8% from 7.7% in October, primarily because of a steep drop of 160,000 in the state's labor force.

'Trend Is Sideways'

"The trend is sideways," Allen Sinai, chief economist for Shearson Lehman Bros., said. "If there had been a more normal labor force growth in November, the unemployment rate would have been unchanged, or higher."

But at the White House, spokesman Larry Speakes declared the report to be "good news" that "means we continue on a steady course" for overall employment.

In manufacturing, one of the most closely watched sectors of the economy, employment increased slightly for the second consecutive month after more than a year of steady decline.

However, most basic measurements in the survey were unchanged from October and reflected trends that had been constant for many months, Commissioner Janet L. Norwood of the Bureau of Labor Statistics said. The report was based primarily on Census Bureau interviews with 60,000 households.

Although unemployment has dropped nearly four percentage points from its double-digit high during the 1981-1982 recession, Norwood noted, job growth has been nearly stagnant since late 1984.

"Job growth over the past year was just about enough to provide the number of jobs needed to accommodate the 2 million people who entered the labor force," she told the Joint Economic Committee.

According to the household survey, 62,000 net new jobs were created in November, although a separate survey of 200,000 business payrolls found nearly triple that growth, or 182,000 new jobs.

Analysts including Sinai and Robert Gough, vice president of the Lexington, Mass., firm of Data Resources Inc., said they expected continued slack economic growth into early 1986. Indeed, Gough's forecasting firm now predicts a 0.3% contraction in economic growth during the first quarter of next year--enough to nudge unemployment back above 7%.

The report found that the percentage of adult Americans with jobs remained at the record of 60.7% first reached in October.

Among civilian adult men unemployment was 6%--the same level it had held for four months--while for women it was 6.4%, well within the range it has held for a year. White unemployment was 5.9%, slightly lower than earlier in the year, and black unemployment stood at 15.9%, up from 15% in October but more or less where it has been since late 1984.

Slide May Be Over

In the manufacturing sector, a large gain in October of more than 60,000 new jobs was carried forward in November by another 30,000, suggesting that a yearlong slide may be over. Some 325,000 factory jobs vanished between January and September as American consumers, spending strongly, sent more and more dollars overseas for goods.

Irwin Kellner, chief economist for Manufacturers Hanover, viewed the two-month improvement as a hopeful sign that the manufacturing decline has hit bottom and begun to climb.

"This is something we've been looking for," he said. "I think this indicates a turnaround. These sectors have been under pressure for over a year because of the strong dollar, but the dollar peaked last February, and by now it has come down close to 25%. If this is the beginning of a trend, it will be good for the U.S. economy in 1986."

Sinai, while less optimistic, also saw a sign that the nation's goods-producing decline may be slowing, although most new jobs continue to be in the services sector.

"There is a hint of encouragement in the manufacturing side in the past two months, but it's still inconclusive," he cautioned. "We need to see more factory orders and shipments and final sales as well. You can say that it looks like a bottoming-out process has begun, and a possible turning up. But it's too early to call."

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