US jobless rate slips a bit. But it remains at 7-percent level because economy is barely keeping pace with growing work force
Washington — After falling sharply since the recession ended, the United States unemployment rate now seems to have leveled off in the low 7 percent range. The civilian unemployment rate edged down 0.1 percentage points to 7.3 percent in February, the US Bureau of Labor Statistics (BLS) reported Friday. Some 106.7 million Americans had civilian jobs last month, but another 8.4 million couldn't find jobs.
``Both the level and rate of unemployment have changed little since last May, following steady declines throughout 1983 and the first half of 1984,'' says Janet L. Norwood, the bureau's commissioner.
The current unemployment situation contains a number of significant disparities, experts say. These include:
Reductions in unemployment have been distributed more unevenly than usual among the nation's states and metropolitan areas.
The gap between the state with the lowest jobless rate and the highest rate widened by almost four percentage points between December 1980 and December 1984, the last period for which complete state-by-state data are available.
Job creation in the economy's service sector is moving at a much faster clip than in manufacturing, the traditional foundation of the US economy.
The service sector accounted for 80 percent of the 3.2 million jobs created in the past year, according to government data. Last month the goods-producing sector lost jobs while the service sector created 255,000 positions.
The wide gap between unemployment rates for blacks and whites appears to be growing.
The unemployment rate has remained stuck in the low 7 percent range because the number of new jobs created has been just enough to absorb the individuals deciding to seek work, Mrs. Norwood says.
The economy ``is not growing fast enough to create more jobs than the number of people entering the labor force,'' explains Robert Gough, senior vice-president of Data Resources Inc. For the unemployment rate to fall, the number of jobs created must outpace the number of new entrants to the labor force. The economy has to grow at about a 4 percent annual rate for that to happen, he says.
Many forecasters expect economic growth to slow as the year progresses and thus they say they expect little additional reduction in the unemployment rate.
A key reason for the growing disparity in state unemployment rates is that some regions have been harder hit than others by ``the effects of [world] trade, technological change, and changes in consumption patterns,'' says Gary Burtless, a senior fellow at the Brookings Institution.
``There is a structural shift going on'' of roughly the same magnitude as the nation's change from an agricultural to an industrial society, Mr. Gough says. The latest shift is based on an increase in services and high technology, he says.
States with a strong service or high-tech orientation, such as Massachusetts, enjoy low jobless rates. Among the 11 largest states for which February data are available, Massachusetts enjoys the lowest jobless rate, 3.7 percent.
States that have traditionally been strong in heavy industry, such as Michigan, have fared less well. Among the same 11 states, Michigan has the highest jobless rate, 9.2 percent.
The gap between the state with the highest and lowest jobless rate has widened in the past four years. In December 1980, 8 percentage points separated Oklahoma's 4.2 percent rate from Michigan's 12.2 percent level. In December 1984, 11.7 percentage points separated Massachusetts' 3.9 percent rate from West Virginia's 15.6 percent.
A study by the Full Employment Action Council, a group of church leaders and labor unions, found that in December 1984, 22 states had higher jobless rates than they did in December 1980, prior to the last recession.
And the process of economic adjustment that widened the normal unemployment gap bewteen states continues. Last week Chrylser Corporation announced that contrary to previous plans it would not acquire or build a new auto-assembly plant in the United States.
The company also said it was giving up any attempt to build a subcompact car in the US and would rely on a Japanese affiliate to handle that market segment. The moves could cost 16,000 to 20,000 potential new jobs, analysts say.
Overall, businesses put 120,000 additional workers on the payroll last month. In the service sector some 255,000 jobs were added, but that was partly offset by the loss of 137,000 jobs among goods-producing companies.
Except in the auto and electrical equipment sectors, factory employment has shown little growth since last summer, Mrs. Norwood said. -- 30 --