THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, November 2, 1996 TAG: 9611020320
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: ASSOCIATED PRESS
DATELINE: WASHINGTON LENGTH: 53 lines
Unemployment held steady at a low 5.2 percent in October as businesses resumed hiring new workers at a brisk pace - fresh evidence, President Clinton said, of a vibrant economy just days before the election.
Clinton, who has made the economy the centerpiece of his re-election drive, contended Friday's report proved the falsehood of challenger Bob Dole's claim of a looming downturn.
Friday's employment report showed businesses added an additional 210,000 workers in October, a significant rebound from September when payroll employment had fallen by 35,000.
In other reports, the Commerce Department said that orders to U.S. factories surged by 2.7 percent in September, the biggest advance in two years. And the Index of Leading Indicators, a key barometer of future activity, rose for an eighth consecutive month, although the small 0.1 percent advance signaled the economy is slowing.
Private economists said the blizzard of new reports underscored the challenge Dole faces in trying to convince voters that the economy is not doing well.
``This is another set of numbers that is an incumbent politician's dream,'' said Robert Dederick, chief economic consultant for the Northern Trust Co. of Chicago. ``We have comfortable growth but not so rapid as to trigger inflation concerns.''
Economists were skeptical about Dole's warnings that a report Wednesday of sharp deceleration in the gross domestic output, from 4.7 percent to 2.2 percent, could be signaling an outright recession.
Rather, they argued that the slowdown was just what is needed to prolong the recovery, already the third longest on record, by keeping inflation in check.
Financial markets showed little reaction to Friday's reports, which were in line with forecasts. The Dow Jones Industrial Average ended the day down 7.45 points at 6,021.93. Bond prices, after staging a rally earlier in the week that drove yields down to the lowest level since last April, gave up some of those gains. Treasury's benchmark 30-year bond ended the day at 6.68 percent, compared to 6.64 percent on Thursday.
On the inflation front, the employment report showed no wage pressures last month, with average hourly earnings unchanged. Economists said the continued good news on inflation should keep the Federal Reserve from raising interest rates for the rest of the year and perhaps well into 1997.
The employment increase was led by 119,000 new jobs in the service sector, the biggest gain since May, led by strength at retail establishments. Hiring was also up at hospitals, schools and recreation centers.
KEYWORDS: NATIONAL UNEMPLOYMENT RATE by CNB