America's newspaper industry is big business, a fact not fully understood by many citizens. And it's not a dead industry, despite premature obituaries in the age of television.

In terms of employment, newspaper workers totaled 382,700 in 1976 (up from 378,500 in 1975), ranking the industry as America's third largest manufacturer behind only autmobiles and steel.

Revenues to support workers in the industry and publishers profits come from two sources - advertising and circulation. By far the largest source of money is advertising. Last year, ad income for daily newspapers topped $10 billion for the first time, up more than 20 per cent over the recession-impacted 1975.

Classified advertising revenues reached $2.8 billion in 1976, up more than 25 per cent in one year. The American Newspaper Publishers Association forecasts that, by 1980, total advertising spending in the U.S. economy will be $48 billion, of which newspapers will attract the largest share - $15 billion.

Companies and individuals spend advertising dollars to attract readers. In 1976, daily newspaper circulation rose 322,000 to about 61 million and Sunday circulation rose 468,000 to about 51.6 million.

The number of dailies actually increased by 6 last year to 1,762 (346 published in the morning and 1,435 in the afternoon). The number of Sunday newspapers rose by 11 to 650, a record high.

Although Sunday readership has never been so high, daily readership has not kept pace with the country's population growth. Last year's daily circulation was not as high as in the years 1966 through 1974.

The decline in overall readership is considered by many publishers to be one of the industry's most significant problems. The story can be told best when comparing the country's population in the 21-64 age brackets, which should be prime readers with circulation:(TABLE) (COLUMN)Daily(COLUMN)21-64 Year(COLUMN)Circulation(COLUMN)Population 1946(COLUMN)50,927,505(COLUMN)82,226,000 1970(COLUMN)62,107,527,(COLUMN)104,730.000 1976(COLUMN)60,977,011(COLUMN)114,818,000(END TABLE)

Americans who do read newspapers spent $2.9 billion for daily and $1 billion for Sunday newspapers in 1975, the latest year fo which data are available. The average number of pages per issue is 60 for morning papers, 53 for evening and 180 on Sundays, publishers spent $3 billion for more than 9.5 million tons of newsprint in 1976 on which to print their publications.

Although most publishers say circulation revenues do not cover actual costs of the raw materials used in a single copy of a newspaper, sales prices also have been rising steadily. In 1965 nearly all dailies cost 10 cents a copy or less year, some 300 papers held to that price, but 1.187 charged up to 15 cents, 240 up to 20 cents and 16 charged more than 20 cents.

The number of weekly newspapers in the U.S. rose by 93 last year to 7,579; weekly circulation rose 3 million to more than 38 million and estimated readership was 152 million. While the number of weeklies has declined from more than 8,000 in the 1960s, average weekly circulation has been increasing and exceeded 5,000 in 1976.

Some other newspaper industry facts:

The number of daily newspapers in 1976 - 1,762 - was just one fewer than were published in 1946. The greatest number of dailies published in recent years was 1,774 in 1973. The most significant growth has been among dailies with circulation exceeding 50,000 - from 199 in 1946 to 250 last year.

Since World War II, the weight and number of pages in the average newspaper have more than doubled.

Of all the money spent on advertising last year, about 30 per cent went to newspapers, 20 per cent for television, 7 per cent for radio, 5 per cent to magazines and 38 per cent to direct mail, business papers, outdoor displays and miscellaneous media.

Although current industry employment is below a recent peak of 385,500 in 1973, the number of female workers has been rising: 97.500 in 1970, 111,600 in 1973, 124,600in 1976.