Title: Unemployment Drops Slightly, but Payrolls Cut Again
Source: Fox News
URL Source:
http://www.foxnews.com Published: Sep 5, 2003
Author: Fox News
Post Date: 2003-09-05 10:29:14 by Badeye
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Unemployment Drops Slightly, but Payrolls Cut Again
Friday , September 05, 2003
WASHINGTON — The civilian unemployment rate improved marginally last month — sliding down to 6.1 percent — as companies slashed payrolls by 93,000. Friday's report sent mixed signals about the nation's overall economic health.
August was the seventh consecutive month of cuts in payrolls, a survey released by the Labor Department (search) showed, indicating continuing weakness in the job market. But the overall seasonally adjusted unemployment rate fell from 6.2 to 6.1 percent of the labor force, as reflected by a broader survey of U.S. households.
Last month's power blackout in the Northeast and Midwest caused significant disruptions in the economy, but Labor Department analysts say it was unlikely to have affected either of the monthly surveys.
The survey of businesses showed that job cuts were heavy again in manufacturing, a sector that has suffered the brunt of the economic downturn that began in March 2001.
President Bush on Monday announced he was creating a new assistant secretary of Commerce position to focus on revitalizing that part of the economy.
Hiring in health care and construction helped offset losses in factories and other industries, such as information, professional and business services and government, Friday's report said.
Labor Department analysts believe the survey of businesses provides a more reliable picture of the jobs market than the household survey.
The payroll report is based on a larger sample and estimates "are regularly anchored to" counts derived from employment insurance tax records, said Kathleen P. Utgoff, Bureau of Labor Statistics (search) commissioner.
Last month, the number of people in the labor force remained largely unchanged, with just 10,000 giving up their job searches. The labor force is comprised of those working and looking for work.
Nearly 2 million people in August were unemployed for 27 weeks or more, representing nearly 22 percent of all jobless workers. Those figures were similar the July numbers.
Recent data indicate an improving economy, yet favorable conditions have yet to trickle down to the jobs market. Businesses still are cautious about hiring and adding new positions, the major factor holding back the economy.
That could spell problems for Bush's re-election next year, with polls showing the economy as the top concern for likely voters, replacing terrorism and Iraq.
With other parts of the economy on the mend, economists believe the Federal Reserve (search) will hold a key short-term interest rate steady at a 45-year low of 1 percent when it meets on Sept. 16. If the job market doesn't turn around, however, analysts don't rule out a Fed rate reduction down the road.