Originally created 02/07/98

Unemployment rate near 24-year low



WASHINGTON -- Robust job growth in January held the nation's unemployment rate near a 24-year low as America's vibrant labor market showed no sign of spillover from Asia's financial disarray.

Wall Street applauded the employment strength, coupled with only a moderate hourly wage gain, and the Dow Jones stock average surged toward last summer's record.

January's seasonally adjusted unemployment rate, 4.7 percent, was the same as December's and just a notch above the 4.6 percent rate in November, lowest since 1973, the Labor Department said Friday.

Average hourly wages rose moderately in January, up 4 cents to $12.51. They're up 3.8 percent over the past 12 months, in line with last year's rapid improvement in productivity.

With that assurance, the big employment gain reported didn't send the usual inflation jitters through financial markets. Bond prices dipped then recovered. The Dow Jones average climbed 72.24 points to close at 8,189.49 -- just 70 points shy of its Aug. 6 record and extending the week's gain to 282.99 points.

Employers created a greater-than-expected 358,000 jobs. Construction accounted for 92,000, the largest gain in nearly two years. It partly reflected unseasonably warm winter weather in many parts of the country and repair jobs following ice storms in the Northeast.

The job market isn't yet feeling the pinch of Asian currency devaluations, which are expected to slash U.S. export sales and trigger a torrent of newly cheap imports.

"This is as good as it gets," said economist Norman Robertson of Smithfield Trust Co. in Pittsburgh "The economy clearly is very resilient. ... Certainly the numbers coming in don't show imminent weakening."

Manufacturing, the economic sector most likely to first feel the impact of Asia, added 43,000 jobs, in line with increases the previous three months. Industries reporting gains included metal products, industrial machinery, electronic components, aircraft and plastics.

Real estate, computer and data-processing services, and engineering and management services all recorded rapid job growth. Department stores added jobs on a seasonally adjusted basis, but miscellaneous retail establishments had larger-than-usual layoffs following robust holiday hiring.

Only 9,000 of the new jobs came in government.

"We have the smallest percentage of these new jobs in the public sector and the highest percentage in the private sector in the United States since the 1920s," President Clinton told reporters at a news conference with British Prime Minister Tony Blair.

Tim Loncharich, president of Snelling Personnel Services of Dallas, with 300 offices nationwide, said demand for labor is every bit as strong as it was in early fall when the Federal Reserve was poised to cool the economy with an interest-rate increase.

Federal Reserve policy-makers had been anticipating raising rates to keep wage pressures from aggravating inflation but, at a meeting this week, decided against changing them.

BYLINE1:By Dave Skidmore

BYLINE2:Associated Press

WASHINGTON -- Robust job growth in January held the nation's unemployment rate near a 24-year low as America's vibrant labor market showed no sign of spillover from Asia's financial disarray.

Wall Street applauded the employment strength, coupled with only a moderate hourly wage gain, and the Dow Jones stock average surged toward last summer's record.

January's seasonally adjusted unemployment rate, 4.7 percent, was the same as December's and just a notch above the 4.6 percent rate in November, lowest since 1973, the Labor Department said Friday.

Average hourly wages rose moderately in January, up 4 cents to $12.51. They're up 3.8 percent over the past 12 months, in line with last year's rapid improvement in productivity.

With that assurance, the big employment gain reported didn't send the usual inflation jitters through financial markets. Bond prices dipped then recovered. The Dow Jones average climbed 72.24 points to close at 8,189.49 -- just 70 points shy of its Aug. 6 record and extending the week's gain to 282.99 points.

Employers created a greater-than-expected 358,000 jobs. Construction accounted for 92,000, the largest gain in nearly two years. It partly reflected unseasonably warm winter weather in many parts of the country and repair jobs following ice storms in the Northeast.

The job market isn't yet feeling the pinch of Asian currency devaluations, which are expected to slash U.S. export sales and trigger a torrent of newly cheap imports.

"This is as good as it gets," said economist Norman Robertson of Smithfield Trust Co. in Pittsburgh "The economy clearly is very resilient. ... Certainly the numbers coming in don't show imminent weakening."

Manufacturing, the economic sector most likely to first feel the impact of Asia, added 43,000 jobs, in line with increases the previous three months. Industries reporting gains included metal products, industrial machinery, electronic components, aircraft and plastics.

Real estate, computer and data-processing services, and engineering and management services all recorded rapid job growth. Department stores added jobs on a seasonally adjusted basis, but miscellaneous retail establishments had larger-than-usual layoffs following robust holiday hiring.

Only 9,000 of the new jobs came in government.

"We have the smallest percentage of these new jobs in the public sector and the highest percentage in the private sector in the United States since the 1920s," President Clinton told reporters at a news conference with British Prime Minister Tony Blair.

Tim Loncharich, president of Snelling Personnel Services of Dallas, with 300 offices nationwide, said demand for labor is every bit as strong as it was in early fall when the Federal Reserve was poised to cool the economy with an interest-rate increase.

Federal Reserve policy-makers had been anticipating raising rates to keep wage pressures from aggravating inflation but, at a meeting this week, decided against changing them.