Unemployment continued to decline in January, edging down from 6.4 to 6.3 percent, the Labor Department reported yesterday. The figures confirmed that the dramatic December improvement in employment was not an accident.
The January level is the lowest since October, 1974. In December the rate tumbled from 6.7 percent to 6.4 percent.
White House press secretary Jody Powell told reporters that the President "obviously feels that the improvement in the unemployment picture is good news." But Powell quickly added that steady improvement in the economic situation should not call into question the "need for a tax cut."
Carter has proposed a $25 billion tax cut to take effect Oct. 1. The President argues that the effects of the economic stimulus package Congress enacted last year will be wearing off by then and the economy will need the spending boost a tax cut would bring. While some legislators question the need for a cut that big, the administration has worried publicly that Congress will cut taxes too much.
If the predictions in the budget President Carter sent to Congress last week are correct, there will be little further improvement in unemployment for the balance of the year.
The administration projected that the unemployment rate would fall to a 6.2 percent average during the last three months of the year.
Labor Secretary Ray Marshall was so pleased by the January decline that he issued his first statement ever commenting on a monthly change in the unemployment rate.
It shows, Marshall said, that analysts who "mistrusted" the December figures were wrong. Marshall said that the continuing and substantial improvement in unemployment - it was 7.4 per cent last January - is the result of the "rapid expansion of our employment and training programs under the President's economic stimulus package," that was passed by Congress last year.
Marshall also said that there has been a substantial improvement in the employment scene for blacks, although at 12.7 percent the black unemployment rate remains very high.
Since last May the number of blacks with jobs has risen 5.2 percent and the number of black teenagers with jobs has gone up 13 percent. However, because of a big rise in the number of blacks seeking jobs, there has been no improvement in their unemployment rate over the year.
The unemployment rate is the percentage of the labor force out of a job but actively seeking work. The labor force is simply the sum of those with jobs and those seeking them.
The unemployment rate is based on a survey of 56,000 households. Until last month the survey was conducted among 47,000 households. The Labor Department said that the bigger sample will improve the reliability of the jobs figures, especially in rural areas.
The number of persons with jobs rose by 272,000 in January while the number of persons in the labor force grew by 188,000.
The Labor Department also collects data based on a survey of employer payrolls, one that is not as inclusive but is considered more accurate on a month-to-month basis by economists.
The January increase showed an increase in payroll jobs of 255,000 to 83.7 million.
The household survey showed 92.9 million Americans with jobs and 6.2 million unemployed.
The unemployment rate for adult men averaged 4.7 per cent in January, compared with 4.6 percent in December, while the rate for adult women fell to 6.1 percent from 6.6 percent in December. The black unemployment rate remained at 12.7 per cent, while the black teenage rate rose to 38.7 percent from 38 per cent. The unemployment rate for white workers remained at 5.7 per cent.
Over the year the number of persons with jobs rose by 4 million, while the size of the labor force increased by 3 million.
The length of the average work-week declined sharply, however, to 35.7 hours from 36.2 hours, primarily.
In a related development, George Washington University professor Sar Levitan, chairman of the National Commission on Employment and Unemployment Statistics, told the Congressional Joint Economic Committee that the "national data about the numbers employed or seeking work fall short of meeting the needs for designing a full employment policy.
He pointed out for example, that the current unemployment figures do not count as unemployed workers too discouraged by conditions to look for a job. But they do count youngsters looking for a couple of hours of leaf-raking as actively seeking work, he said.
Furthermore, Levitan said, the jobless figures do not do a good job of reporting how weil off workers are.