WASHINGTON — Unemployment fell slightly to 6.6% in March--the lowest rate in seven years--as a decline in the nation's labor force more than made up for a slowing in the rate of new job creation, the government said today.
The White House proclaimed that "the march of economic progress continues," but private economists saw nothing but bad omens in today's report.
The economists pointed out that the new jobs were in service-producing industries rather than the goods-producing part of the economy.
(After holding steady for two months, California's unemployment rate fell from 6.2% in February to 6.0% in March as 54,000 jobs were added to payrolls, labor officials reported.)
At the national level, the number of Americans at work or seeking jobs fell by 127,000 last month, the Labor Department said.
No Increase Since September
Meanwhile, the number of those listed as unemployed fell 113,000 to 7,854,000. It was the first time that number had sunk below 7.9 million since April, 1980.
The jobless rate had been at 6.7% for three months, with the number of jobless hovering around 8 million. The rate has not risen since September.
Different Labor Department surveys produced contradictory estimates of job growth last month. A survey of households showed employment declining by 14,000 last month, to 111,368,000. But a survey of industrial payrolls showed 165,000 new jobs were created. About 35,000 of those jobs were in retail trade; 73,000 were in health and business services.
The explanation for the seeming disparity is this: A person with two jobs is counted only once in the household survey, while each job is logged in the other calculation.
Manufacturing Jobs Drop
"As has been the case during the entire current recovery, the service-producing industries continued to show strong growth . . . with about 230,000 over the month," said Janet L. Norwood, the department's commissioner of labor statistics. "The goods-producing sector did not fare so well."
Manufacturing employment declined 24,000, the payroll survey showed. Construction employment fell 47,000.
It was the drop in manufacturing jobs that troubled private economists.
"This is the weakest employment report in seven months," said Allen Sinai, chief economist for Shearson Lehman Bros., a Wall Street investment house. "We were due for one, but it signals that we're going to be getting much softer data on economic growth."