Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, February 8, 1992 TAG: 9202080222
SECTION: BUSINESS PAGE: A-8 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
JOBLESS RATE HAS BRAKES ON GROWTH
The nation's unemployment rate stuck at a five-year high of 7.1 percent in January as employers laid off 91,000 workers, the government said Friday.Economists said the news all but dashed hopes for an economic upturn early in the year.
The Labor Department said 8.9 million Americans were without jobs, 2.5 million more than before the start of the recession 19 months ago. It was the highest number since 1984.
"The recession is still with us," said economist Bruce Steinberg of Merrill Lynch. "A lot of people thought we were bottoming out . . . but this data fits with the idea the economy is still shrinking."
The Labor Department report gave an immediate boost to the bond market, where interest rates fell in anticipation of Federal Reserve action to stimulate the economy. Lower bond rates in turn generated a brief stock market rally. But both rallies fizzled in the afternoon after the Fed drained cash from the banking system, signaling it was not ready to cut rates again.
"This will give people the double-dip in mortgage rates they want," said economist Paul Getman of Regional Financial Associates in West Chester, Pa.
The Federal Home Loan Mortgage Corp. said average rates on 30-year, fixed-rate mortgages fell for the first time in four weeks. They were 8.67 percent compared with 8.68 percent last week.
The fresh deterioration in the job market came despite hints of recovery elsewhere in the economy, including gains in housing and better-than-expected sales last month among major retail chains.
Increases in government and health and financial-service jobs were not enough to offset a sharp drop in factory and retail employment.
Construction lost 6,000 jobs despite increased home building. And the 51,000 decline in retailing came although weak holiday hiring had led many analysts to hope for fewer layoffs after Christmas.
Analysts expect the unemployment rate to inch higher in the next few months even if economic growth picks up a bit. Employers tend to delay hiring until they're sure an upturn will be sustained.
The administration is projecting a painfully slow improvement even if Congress adopts the president's proposal for reviving the economy with tax incentives. It predicts unemployment will average 6.9 percent this year and not return to the prerecession level of 5.3 percent until 1997.
Rising unemployment hit the South and West particularly hard in January after showing up a month earlier in the industrial Northeast and Midwest.
Nationally, the rate rose for adult men, particularly black men. That rate, 13.4 percent, was the highest of the recession.
The number of people who have quit looking for work remained at about 1.1 million. The number holding part-time jobs rose 400,000 in January to 6.7 million. All of the increase was accounted for by people who were looking for full-time work but couldn't find it.