Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, February 2, 1991                   TAG: 9102020132
SECTION: BUSINESS                    PAGE: A-8   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

JOBLESS RATE CLIMBS/ JANUARY FIGURE HIGHEST IN 3 1/2 YEARS

"For millions of Americans, this means more than a `temporary interruption' in their wages, their rents, their mortgage payments and their health care bills. It means an enormous disruption in their lives," said House Majority Leader Richard Gephardt, D-Mo.,

Private analysts, too, said the new unemployment calculation may destroy hopes for a short, mild recession.

"Today's dismal unemployment report should eliminate any illusions that this recession is just a temporary nuisance," said Lawrence A. Hunter, an economist with the U.S. Chamber of Commerce.

Last month's rise in the jobless rate, up from December's 6.1 percent, means that unemployment since June has shot up at its fastest pace since the last recession. Seven months ago, unemployment was at a relatively low 5.3 percent.

Since then, 1.2 million Americans have joined the ranks of the unemployed and the nation's businesses have cut more than 1 million jobs, said the Labor Department report, which was based on a survey of payrolls.

In January alone, payrolls tumbled by 232,000 jobs. Manufacturing and construction were particularly hard hit.

That huge loss followed a December decline of 150,000 jobs, a revised number about twice as bad as that first reported by the government.

In a separate calculation of unemployment that counts members of the armed services stationed in the United States, the January jobless rate was 6.1 percent, up from December's 6.0 percent.

In another sign of economic weakness in January, the average manufacturing work week fell in January, down 0.5 percent to 40.2 hours per week. Manufacturing overtime was also cut back, falling to 3.4 hours, down from the 3.6 overtime hours recorded in December.

In a separate report, the government reported construction spending slid for a ninth straight month in December, falling 0.5 percent and helping trim building growth for the year to just 0.6 percent.

Many analysts forecast a rebound in residential building later this year but no significant improvement on the non-residential side. And government outlays remain a question mark because of the uncertain effects of the recession on revenues.

Overall, said economist Daryl Delano of Cahners Economics in Newton, Mass., "I believe it will be a down year."

The Commerce Department said spending on residential, non-residential and government projects in December totaled a seasonally adjusted annual rate of $415.1 billion, the lowest level since a $410.5 billion rate in January 1988.

The report said 450,000 construction jobs now have been lost since last May.

Residential spending continued to decline, falling 2.3 percent in December to an annual rate of $167.5 billion after a 3.2 percent decline a month earlier.

Delano said residential building should bounce back "fairly quickly" once demand picks up because of the lowest level of inventories in five years.

"But it's a different story on the non-residential side where there is a lot of well-documented excess office, hotel and retail space," he said.