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Unemployment Rate Dips to 6.7%, a 2-Year Low

September 05, 1993| from Newsday

The nation's jobless rate dropped slightly in August to 6.7%, its lowest level in two years, but tempering that good news Friday was another measure showing that the economy lost jobs during the month.

Economists said the reports show the economy is continuing to improve, but with painful slowness. "Nationally, it's far from a robust recovery," said Samuel M. Ehrenhalt of the U.S. Bureau of Labor Statistics.

While the national unemployment rate edged down from July's 6.8%, the closely watched measure of non-farm payroll jobs dropped by 39,000 in August after increasing by 211,000 the month before.

The report was seen as positive news in the inflation-hating bond market, where traders figure the economy is so weak there's no reason for the Federal Reserve to raise interest rates. In fact, some analysts think the Fed may lower rates in the next month.

The yield on the 30-year Treasury bond fell Friday to 5.94%, the first time it has closed below 6% since the government began selling the bond regularly 16 years ago. Because the bond market has a major influence on consumer interest rates, it's possible that 30-year fixed mortgage rates will fall. On the downside for investors, rates on certificates of deposit could fall as early as Tuesday.

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