WASHINGTON — Unemployment dipped below 7% last month for only the third time during Ronald Reagan's presidency, but there was little evidence from a separate report on the government's barometer of near-future economic activity that a long-awaited rebound will be a strong one.
The nation's jobless rate fell 0.2% to 6.9% in July, the Labor Department said, as a rebound in construction activity helped create 210,000 new jobs.
Employment rose to a record 109,882,000 as the labor force--those working or looking for work--declined for the first time in three years.
The 44,000 drop in the labor force to 118,072,000 halted a growth trend that totaled 2.4 million new jobholders and job-seekers over the last year.
Unemployment fell most dramatically for women and blacks while the rates for whites and adult men remained largely unchanged.
A rebound of 55,000 new jobs in construction after an unusual decline of 30,000 in June countered continued weakness in manufacturing employment.
Factory jobs fell 25,000 last month, raising to nearly 400,000 the manufacturing job losses since mid-1984.
"The distressing news is the continuing decline in factory jobs," said Janet L. Norwood, commissioner of labor statistics, in congressional testimony.
Job losses in the oil and gas industry, which have accompanied plummeting world oil prices, leveled off in July after sharp losses over the previous five months.
Service employment continued to show the biggest gains of any sector, up 245,000. Retail trade jobs rose by 70,000 and employment in the finance, insurance and real estate industries climbed by 35,000.
Meanwhile, the Commerce Department said its composite index of leading indicators climbed a slight 0.3% in June, suggesting that signs of the long-awaited rebound in economic activity are not yet on the horizon.
The department said the gain followed a 0.1% decline in May.
Change in Method
The index would have fallen in June as well, but the government revised its methods of tracking mortgage lending activity, which is one of the business statistics measured in the index.
Without the revision, the index would have dropped 0.1% last month.
The index has been lackluster for much of this year, rising just 2.8% since December.
Analysts said this weak performance is an accurate reflection of the fact that the economy is showing little signs of an upturn.
The biggest factor contributing to strength last month was a rise in the price of raw materials used in manufacturing. Other positive factors were a rise in stock prices, a gain in capital equipment orders, an advance in the money supply, a rise in manufacturers' orders for consumer goods and a gain in building permits.