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Joblessness steady at 4.5%
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August 7, 1998: 9:23 a.m. ET
Despite massive GM layoffs in July, U.S. businesses created 66,000 new jobs
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NEW YORK (CNNfn) - The General Motors strike huffed and it puffed but failed to blow the nation's employment house down in July as the jobless rate held steady amid a continuing, albeit sharply curtailed, growth in payrolls, the Labor Department said Friday.
The unemployment rate remained unchanged in July at 4.5 percent, as businesses created 66,000 new jobs outside the non-farm sector, a dramatic slowdown from a downwardly revised 196,000 rise in June.
The growth rate was the lowest since a 48,000 drop in January 1996.
But traders and analysts took the weakened growth in stride, focusing instead on the hidden upsides of an economy that is able to generate job growth in the face of an auto strike that idled nearly 200,000 workers at its peak.
The strikes paralyzed GM's North American operations and shaved half a percentage point from the nation's overall economic output.
"If you can lay off all those people at GM and still have 66,000 new jobs created last month, that's really pretty strong," said Maureen Allyn, a chief economist with Scudder Kemper Investments.
The Labor Department estimated that the GM walkouts reduced payrolls by 140,600 in July.
Allyn predicted that job growth may begin to slow by year's end, as flatter corporate profits cause companies to tighten the job spigot.
Bonds traders, distracted by Asia's turmoil, largely shrugged off the figures as a reflection of what they felt they already knew: that the underlying economy remains strong. After trading down more than half a point just before the numbers' release, the 30-year benchmark rebounded slightly, off 12/32 in price to yield 5.64 percent.
Average hourly earnings rose 3 cents to $12.75, though the rise would have been 4 cents without the GM strike, the Labor Department said.
The average workweek was unchanged at 34.6 hours, though the average hours for factory workers fell to 41.7 from 41.8. 
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