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Jobless Rate Steady At 5.3 Percent

November 3, 1989

WASHINGTON (AP) _ Unemployment held steady at 5.3 percent last month as the economy added 233,000 jobs, the government said today in a report that showed continued troubles in the industrial sector.

The Labor Department said all of the non-farm payroll growth came in the service-producing sector, with most of that coming as schools and local governments continued to add jobs for the school year.

The department revised September payroll growth downward to 201,000 from the previously reported 209,000.

The manufacturing sector, which lost a revised 88,000 jobs in September, lost an additional 13,000 in October to post its fourth consecutive monthly decline.

Underscoring the weakness in that sector was new data showing the average manufacturing workweek fell from 41.8 hours to 40.8 hours and overtime was virtually non-existent after averaging just under four hours a week for several months. The automobile manufacturing industry continued to struggle, losing 14,000 jobs last month.

The 233,000 jobs added to non-farm payrolls was more than most analysts had predicted and likely will give pause to Federal Reserve policymakers who had been seen as leaning toward a further easing of credit, which in turn would lower interest rates.

Analysts said the report showed the economy continued to expand, although at a far slower pace than last year, and that the growth was strong enough to prevent a further easing of credit by the Federal Reserve. The Fed policymakers meet Nov. 14 to discuss monetary policy.

″The economy is clearly slowing down but once again there’s no recession in these numbers,″ said Micheal Evans, head of a Washington forecasting firm. ″There is, however, continued sign of accelerating wages and the Fed is worried about that, so they couldn’t possibly ease as a result of this report.″

The Labor Department determines unemployment through a household survey and its job-growth totals through a separate business survey. The two surveys often give conflicting data on employment growth and today the department said it had determined why - more Americans are holding two or more jobs.

″Most dual jobholders appear on two or more payrolls in the business survey but are counted only once in the household survey,″ Labor Statistics Commissioner Janet Norwood said in testimony she was giving Congress today. ″With the demand for labor strengthening considerably in recent years, increasing numbers of workers have taken on secnd jobs.″

Also up at a rate higher than predictions were average hourly earnings, which rose 0.7 percent in October, a sign that upward pressure on wages persists. Most analysts had predicted an increase of 0.4 percent.

The October report showed that the civilian labor force grew by 65,000 Americans last month to 124 million and that 117.5 million of them had jobs. The labor force consists of those who either have jobs or are actively seeking work.

While the manufacturing workweek declined, the overall workweek in the private, non-farm sector edged up by 0.1 hour in October to a seasonally adjusted 34.8 hours. The department attributed most of the decline in manufacturing hours to the strike by Boeing workers. They were not counted as being off payrolls, however, because their strike began the same week the department took its monthly survey.

While local government payrolls expanded because of the school year, job growth in the health-services sector continued its steady growth, adding 33,000 jobs in October. Job growth in business services was just 1,000; employment in finance, insurance and real estate was flat or up just slightly.

Retail trade added 24,000 jobs last month while transportation and public utilities added 27,000 jobs in October and wholesale trade 6,000.

But in manufacturing and other goods-producing industries the news was less encouraging.

Mining and construction posted modest gains, as did the non-durable manufacturing sector. But the declining payrolls in auto plants and electrical and metal plants continued.

The unemployment rates among demographic groups changed somewhat, with joblessness among white adult men falling from 4.8 percent to 4.5 percent and rising among white adult women rising from 4.5 percent to 4.7 percent.

Overall teen-age unemployment fell from 15.1 to 14.9 percent, a figure influenced by the start of school.

Among black adult men, unemployment rose from 10 percent to 10.3 percent. Joblessness among black adult women also rose, from 9.6 percent to 10 percent.

Unemployment among black teens fell from 37.3 percent to 34.2 percent and among Hispanics the rate dropped from 8.3 percent to 7.9 percent.

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