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Jobless Rate Stays at 5.9%; California Lowest Since '70

September 05, 1987|TOM REDBURN | Times Staff Writer

WASHINGTON — The overall U.S. unemployment rate remained unchanged at 5.9% in August, the Labor Department reported Friday, as an estimated 370,000 more people gained jobs over the previous month.

In California, the jobless rate fell to 5.4%, down from 5.5% in July and the lowest level since 1970.

Nationally, most of the seasonally adjusted increase in employment was among teen-agers, who join the job market in large numbers during the summer.

The number of people joining the labor force almost matched those gaining jobs, leaving the number of jobless workers basically unchanged at 7.2 million.

The civilian unemployment rate, which does not include members of the armed forces, also held steady at 6%.

The job report provides further evidence that the nation's five-year-old economic recovery may be getting a second wind, beginning to expand at a somewhat faster pace than the relatively sluggish rate of about 3% over the last three years.

"The (jobless) rate did well to hold at 6%, and I think that's a healthy sign for the economy," said Allen Sinai, chief economist at Shearson Lehman Bros. in New York.

But a recent rise in the number of factory jobs stalled last month, with the entire increase of 155,000 non-farm payroll jobs reported in a separate survey occurring in the service sector.

There was no decline in the unusually high number of hours worked at factories, however, suggesting that industrial production made modest gains last month.

During the last 15 months, the jobless rate has moved steadily downward from 7.1% without a single monthly upward movement.

Surge Continues

More than 3 million people have found work during the last year, continuing the surge of employment that has added more than 13.6 million jobs since the 1982 recession ended.

But Janet L. Norwood, head of the Bureau of Labor Statistics, told a congressional committee that the pace of job growth, particularly in factory jobs, is somewhat slower than the rate during the previous expansion of the late 1970s.

With Labor Day coming this Monday, Rudy Oswald, chief economist at the AFL-CIO, said that "6% is clearly a big improvement from where we were earlier in this decade, but it is still relatively high compared with any recovery in the postwar period."

Oswald also pointed out that the unemployed are generally worse off during this economic recovery than they have been in the past, with only 29% of those listed as jobless receiving some form of unemployment benefits last month.

The current recovery, however, has already matched the length of the 58-month-long expansion from 1975 to 1980, and most economists believe that it will continue for some time, which should reduce the unemployment rate further in the months ahead.

'Best Economic Barometer'

"Jobs are the best economic barometer there is, and the meter reads excellent," White House spokesman Marlin Fitzwater said.

Recent surveys of the job market show that the demand for labor is increasing, with many firms converting part-time workers to full-time employment. The number of people working part time because they could not find full-time jobs dropped by nearly 250,000 in August, according to the Labor Department survey.

The jobless rate for most categories of workers was relatively unchanged last month, with blacks showing one of the few signs of improvement, to 12.4% from 12.6%.

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