Unemployment rate up to 6.1% nationwide in Dec., continuing climb

January 05, 1991|By Stephen E. Nordlinger | Stephen E. Nordlinger,Washington Bureau of The Sun

WASHINGTON -- In two grim reports on the state of the economy, the government said yesterday that the nation's unemployment rate had reached the highest level in more than three years and that factory orders plunged in November by the largest amount on record for a single month.

Together, the reports provided further stark evidence that the economy is mired in its first recession in eight years.

The Labor Department reported that the unemployment rate in December rose to 6.1 percent, continuing a steep climb that began in June, when the rate broke out of a long stretch of hovering around 5.3 percent.

The number of jobless Americans rose to 7.6 million last month, 263,000 more than in November, when the unemployment rate was 5.9 percent.

The December unemployment rate was the highest since the 6.1 percent recorded in July 1987, when the rate was declining following the severe impact of earlier layoffs in the depressed oil sector.

"We are in a serious situation," said Janet Norwood, commissioner of labor statistics. "The labor market is deteriorating."

At the White House, presidential spokesman Marlin Fitzwater said the job report "certainly is very difficult and troubling information."

"We are hopeful that the drop of interest rates and controls on federal spending will allow this to be a short-lived recession," he said.

"But no one can say for sure."

In a separate report, the Commerce Department said orders to U.S. factories for manufactured goods fell 5.9 percent in November, the biggest decline since the department began tracking orders in 1958. The previous record was a 5.5 percent drop last January.

Over the last three months, the Labor Department said, the number of jobs has plummeted by 515,000, the worst stretch of declines in payroll employment since 1982, in the midst of the last recession.

But yesterday's figures showed some moderation.

The number of jobs fell 76,000 last month after declining 259,000 jobs in November.

Ms. Norwood said, however, that the smaller one-month drop after the huge losses previously should be treated cautiously in trying to predict the course of the economy.

Most economists think the recession will last at least until midyear and that the unemployment rate will peak at about 7 percent.

There was another sign of a slumping economy yesterday when the Big Three automakers announced that they will continue reducing car and truck production by shutting down all or part of 29 assembly plants next week and temporarily laying off 62,000 workers.

These cutbacks follow the announcement Thursday by Sears, Roebuck & Co. that it will eliminate 21,000 jobs.

The Labor Department said jobs in the manufacturing sector declined last month by 33,000, bringing the loss since December 1989 to nearly 600,000 jobs.

Reflecting the weak housing sector, the number of construction jobs fell by 28,000 last month, bringing the total over the past year to 221,000.

In the service sector, once a bright spot in the job market, 21,000 jobs were lost in December, mainly because of sharp cutbacks at stores in anticipation of weak Christmas sales.

At retail stores, after seasonal adjustment, 50,000 jobs were lost last month.

Reflecting the aging population, jobs in the health sector continued rising as 56,000 jobs were added last month.

Adding to the gloomy job picture, the Labor Department said that the number of discouraged workers -- those who say they want jobs but have given up looking in a depressed market -- increased by 110,000, to 941,000, in the final quarter of 1990 to the highest level since 1988.

The number of people working part-time who would prefer full-time employment reached 5.58 million last month, up 150,000 since November and 560,000 since June, the department said.

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