Job rate stays same, but mix changes. Service area grows, while manufacturing loses more jobs to imports

The nation's jobless rate did not budge in October. But significant changes are going on beneath the surface of the unemployment picture, including an erosion in the number of manufacturing jobs because of an influx of imported goods.

The civilian jobless rate in October was unchanged from September's 7.1 percent figure. That means 8.3 million individuals were unsuccessful in finding work last month. Still, a record 107.9 million Americans were working in October and 60.3 percent of the population had jobs, matching a record set in March.

Last month the number of women holding jobs outside the home also hit a new high, 51.4 percent. Since the recession ended three years ago, women have accounted for ``nearly 70 percent of the overall labor-force growth during the recovery,'' says Janet Norwood, commissioner of the Bureau of Labor Statistics.

In addition to the influx of female workers, recent months have been notable for the loss of jobs in the manufacturing sector at the same time the number of service jobs was soaring.

Last month United States manufacturers created 60,000 new jobs. But that ``was a departure from the string of job losses which had totaled 330,000 since early this year,'' Mrs. Norwood told the Congressional Joint Economic Committee. And because of unusual seasonal factors, the job pickup in manufacturing in October may be overstated, she said.

By contrast the service sector in October continued a recent trend by vastly outperforming the manufacturing sector in creating new jobs. Some 324,000 new service jobs were generated last month.

The impact of job loss in manufacturing can be seen in factory employment figures. In October, factory employment was 19.3 million people. That is 1.3 million more than when the recession ended in November 1982 but almost 2 million below the all-time peak factory employment reached in June 1979.

Imports have played a key role in the loss of manufacturing jobs. According to a study by Data Resources Inc., a forecasting firm, between 1980 and 1984 the US lost 1.5 million manufacturing jobs because of imports. Only about one-fifth as many service jobs -- or 300,000 -- were lost to imports in the same period.

The numbers indicate that the manufacturing sector is more prone to import competition. For example, it is easier to import a car than a fast-food restaurant cashier.

The US dollar's high value relative to other currencies has been a key factor in depressing the manufacturing sector, since it makes imports cheaper and US exports more expensive.

But ``it would be erroneous to conclude that the reason we lost those jobs was only due to the rapid appreciation of the dollar,'' says DRI vice-president Robert Gough.

``The main factors have to do with changing world market competition,'' he says. These include ``strong productivity gains in other countries, increased agricultural production gains in other countries that have taken markets away from the US farmer, strong technological capabilties in the newly industrializing countries.''

Since these factors will not change overnight, some economists expect the US to continue losing jobs, especially in the manufacturing sector. ``There will be a deterioration in [the number of] jobs because of imports,'' says Martin Mauro of Merrill Lynch Economics. ``The trade balance is not likely to improve until the middle of next year.''

``Job loss will continue in the US until two things happen -- until the dollar declines some more and until American corporations produce better-quality goods that the world markets want,'' Mr. Gough says.

of 5 stories this month > Get unlimited stories
You've read 5 of 5 free stories

Only $1 for your first month.

Get unlimited Monitor journalism.