U.S. Jobless Rate Fell to 5.7% in August, Payrolls Rose 39,000
By Carlos Torres - 09/06 08:30 EDT
Washington, Sept. 6 (Bloomberg) -- The U.S. unemployment rate unexpectedly fell to 5.7 percent
in August, the lowest since March, and companies added workers to their payrolls for a fourth
straight month, signs the worst round of firings may be over.
The unemployment rate fell from 5.9 percent in July and payrolls increased by 39,000 last month
as more jobs were added in health care, construction, help-supply and the government, the Labor
Department said. In July, employment grew a revised 67,000, about 10 times more than the
government estimated last month.
``The economy is gaining some steam,'' said Lakshman Achuthan, an economist at the Economic
Cycle Research Institute in New York, before the report. ``Consumers keep buying, which is forcing
businesses to produce more, and that's why you see less firing.''
Surging consumer demand for cars and housing may help the economy grow twice as fast this
quarter as in the previous three months. Companies are retaining employees or slowly adding to the
workforce, boosting income growth. That may support consumer spending in coming months.
Economists had expected payrolls to rise by 30,000 last month following a previously reported
increase of 6,000 for July, according to the median of forecasts by 60 economists in a Bloomberg
News survey. The unemployment rate was expected to rise to 6 percent.
The U.S. economy grew at a 1.1 percent annual rate from April to June, down from 5 percent in the
first three months of the year, when most economists say the recovery began.
Growth is likely to accelerate to 2.6 percent this quarter and 3 percent in the last there months of
2002, according to the latest consensus estimate from the Blue Chip Economic Indicators. Last
month, cars and light trucks sold at the fastest pace since October, leading some economists to
predict that forecasts for third quarter growth will be revised higher.
Still, job growth may be sluggish. In the first eight months this year, the economy has lost 48,000
jobs. The U.S. economy needs to create 100,000 to 150,000 new jobs a month to sustain declines
in the unemployment rate, economists say.
Service Employment
Employment in service-producing industries, which include retailers, transportation companies and
government agencies, rose 72,000 in August after rising 108,000 the previous month.
Health care added 26,000 jobs last month, help-supply companies added 51,000 and construction
payrolls rose by 34,000. Government employment increased by 41,000 in August.
``Things are going to come back slowly, and there is a hell of a lot of uncertainty in the world,'' said
Paul Charron, chief executive officer at Liz Claiborne Inc., the maker of Villager and Liz Claiborne
clothing, in an interview last week.
General Motors' sales climbed 18 percent last month as zero- interest loans and discounts helped
clear out 2002 models. Sales by all automakers rose to an annual rate of 18.7 million cars and light
trucks, according to industry estimates. That compares with a 16.7 million rate for the first seven
months of 2002.
Production Increases
The world's largest automaker increased third-quarter production by 22,800 vehicles, or 1.8 percent,
to 1.285 million and said it will build 1.389 million vehicles in the fourth quarter, up 7.3 percent
from the fourth quarter of 2001.
Factories shed 68,000 jobs in August, the most since January. Instead, manufacturers are adding
hours to employees' workweeks. The manufacturing workweek rose to 40.8 hours from 40.7 in July,
and overtime rose to 4.2 hours from 4 hours.
Illinois-based Tellabs said yesterday that sales will fall 15 percent to 25 percent in the third quarter.
To cut costs, it will eliminate 800 more jobs, about half of them in the U.S. The company had
already eliminated 3,750 positions since last year.
``As customers spend less, we must take these painful steps to reduce expenses,'' said Michael Birck,
Tellabs' chief executive officer, in a statement.
Hours, Earnings
Average weekly hours worked rose to 34.1 hours from 34 in July, today's report showed. Workers'
average hourly earnings rose 3 percent, or four cents, in August, after a 0.2 percent increase the
previous month. Economists had expected a 0.3 percent increase in hourly wages. Average weekly
earnings rose to $505.36 last month from $502.52 in July.
The available labor pool fell to 12.6 million from 13.2 million in July. The figure combines the
number of unemployed job seekers and people not counting themselves as unemployed who
nonetheless looked for work in the last 12 months and said they would take a job.
The Labor Department also said that the percentage of the U.S. population holding jobs rose to
66.6 percent in August from 66.5 percent.
Among blacks, the unemployment rate fell 9.6 percent from 9.9 percent in July. The jobless rate for
Hispanics decreased to 7.5 percent from 7.6 percent and for whites fell to 5.1 percent from 5.3
percent.
For teenagers, unemployment fell to 17.2 percent in August from 17.7 percent. The jobless rate for
women fell to 4.9 percent in August from 5.2 percent. The jobless rate for men held at 5.2 percent. |
