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Job market surges ahead
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December 4, 1998: 12:20 p.m. ET
Unemployment falls as service growth spurs creation of new U.S. jobs
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NEW YORK (CNNfn) - The unemployment rate fell back in November while payrolls inched higher, although continuing weakness in the manufacturing sector added a bitter tone to the economic picture, the Labor Department said Friday.
The unemployment rate slipped 0.2 percent to 4.4 percent from 4.6 percent in October, as 267,000 new jobs were created outside the farm sector.
In October, only 116,000 non-farm jobs were created, but the number of U.S. payrolls still has a long way to go before regaining its footing with August's 309,000 figure.
Economists had forecast unemployment to remain steady at 4.6 percent with only 200,000 new jobs created.
The show of strength in the job market dampened the spirits of Treasury traders already jittery over dollar falls in Europe overnight.
However, the bond market quickly took stock of the data and the 30-year bond reconquered territory lost after the release to trade off 6/32, yielding 5.01 percent.
The number of factory jobs fell 47,000 in November after the sector shed 61,000 workers in the previous month.
"The biggest concern is the impact of the Asian situation on the manufacturing sector of the economy," noted Labor Secretary Alexis Herman. "We continue to be concerned about job declines in that area, but . . . the underpinnings of the economy are still very strong in other sectors."
The service sector continued its strong recovery, adding 150,000 new jobs in the month. Retail also added 65,000 jobs, largely as a result of hiring for the peak holiday selling season, while construction picked up 47,000 workers.
As for workers laid off in the recent wave of corporate job cuts, Herman said the future was not necessarily gloomy.
"I think this report is a very good indication that while it's always harsh for workers to be laid off through no fault of their own, this economy is very strong," she said. "We are still creating jobs and what we need to do is help workers ease that transition."
She expected displaced manufacturing workers to find work in other fields, particularly engineering- or computer-related areas.
Furthermore, analysts said the news was good for stock traders, echoing Herman's positive economic outlook.
"The strong employment numbers say there's still power out there in the economy and therefore the earnings picture will continue to be good," said Roy Blumberg, chief market strategist at First Allied Securities. "Meanwhile the hourly wage number was not that strong so it doesn't suggest any pickup in inflation. So it's a good number for Wall Street."
Average hourly earnings rose slightly more than economists had expected, gaining 3 cents to an average pay rate of $12.93 an hour.
The average workweek remained steady at 34.6 hours, on par with last month's figures and marking a return to August's bustling productivity.
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