The nation's unemployment rate held steady in January at 7.4 percent of the work force after seasonal adjustment, the Labor Department reported yesterday. But within the overall figure, the jobless rate for teenagers jumped to 19 percent, its highest level for four years.
The new chairman of the Council of Economic Advisers Murray Weidenbaum commented that the figures "were further evidence that our economy appears to be stuck on a plateau." He added that "President Reagan believes strong action is needed to restore productivity growth, cut inflation and put Americans back to work," and he promised that the president's economic program, to be unveiled on Feb. 18, "is designed to do that."
Many economists have predicted that unemployment will rise in the early part of this year as the economy slows down. But so far there have been few signs of the slowdown, and the jobless rate has fluctuated between 7.4 percent and 7.6 percent since the recession ended in the middle of last year.
Bureau of Labor Statistics Commissioner Janet Norwood commented yesterday on the January unemployment figures that they give a mixed view of the economy. "The doom and gloom predictions have been with us for a while, but so far they haven't materialized," remarked labor economist Sar Levitan yesterday.
The January figures showed a surprising increase in the number of jobs during the month, unusual for this time of year. Employment outside farming was up by 375,000 from December. Most of the increase came in the services sector, with only a small increase in manufacturing employment, the report showed.
Since the trough of the recession last summer, an additional 1.6 million jobs have been created outside agriculture. But this leaves the total only 460,000 up from a year earlier. Within that service sector, jobs were up by 1.1 million while "goods"-producing jobs were down by more than 600,000.
The jobless rates for adult men and women were not much changed last month at 6.0 percent and 6.7 percent, respectively. Despite the gentle decline in overall unemployment in recent weeks, more major groups of workers have a significantly higher jobless rate now than they did a year ago. The average unemployment rate in January 1980 was 6.2 percent compared with last month's 7.4 percent.
Moreover, the average length of time that people are out of work has increased. This was up by a week in the last month, to 14.4 weeks.
There was a big rise in the labor force last month, for the first time since July. Most of this was accounted for by women. The proportion of working-age women who have jobs rose to a record 51.8 percent last month, the Labor Department reported.
In the District of Columbia, the unemployment rate still was climbing slightly at the end of last year, after seasonal adjustment, according to the area labor summary. The rate rose from 7.7 percent to 7.9 percent. For the metropolitan area, the jobless rate slipped slightly from 4.2 percent in November to 4.0 percent in December.
Meanwhile, the Federal Reserve yesterday published figures showing further falls in the money supply in the week ending Jan. 28. The M1-B measure, which includes cash and all checking accounts, dropped sharply by $2.6 billion in the week to $413.4 billion, the Fed said. The narrower M1-A declined from $367.3 billion to $370.6 billion.
The fall in money supply may encourage further declines in interest rates, which recently have begun to fall slowly.
According to the proceedings of the last Federal Reserve Open Market Committee, published yesterday, the money-growth targets for this quarter are somewhat tighter than last year's. In early December the committee raised the M1-A target to 4 1/4 percent but lowered the key M1-B target to a 4 3/4 percent annual rate for the first three months of this year.
The targets are hard to interpret because of technical changes affecting the money figures, most importantly the introduction on Jan. 1 of nationwide Negotiable Order of Withdrawal (NOW) interest-bearing checking accounts. Fed governor Henry Wallich voted against the targets on the grounds that they were too liberal, while governor Nancy Teeters voted against them for being too tight.
The committee also raised its range for the federal funds rate to 15 percent to 20 percent. However, it is now down from the December levels.