The nation's civilian unemployment rate in July remained unchanged at 7.3 percent for the sixth consecutive month as the sharp slide in manufacturing jobs leveled off for the first time this year.
The number of new jobs grew briskly last month, with most of the improvement in services and retail sales, although the labor force also grew strongly, offsetting any job gains.
Since January, manufacturing industries have lost 230,000 jobs, but last month the level of factory unemployment was virtually unchanged, dropping by only 7,000, an amount considered statistically insignificant. However, the number of people who were laid off or fired jumped by nearly 200,000 in July.
White House spokesman Larry Speakes said the unemployment report was good news.
"Yesterday's agreement in the Congress to cut deficits next year by $55 billion, coupled with this week's 1 percent rise in the economy's leading indicators, should guarantee that employment will continue to grow," Speakes said.
The leading indicators are the government's main barometer of future economic activity. The rise in July was the second consecutive monthly increase following about a year of weakness.
Private economists disagreed with Speakes' assessment.
"It's more of the same in the sense that we still have this dichotomy between the apparent vigor of the services sector that shows good solid employment gains from month to month and, on the other hand, the goods-producing sector, which has continued to show declining job gains until recently," said Edward Yardeni, chief economist for Prudential Bache.
"The question that still remains is how long can we have this imbalanced expansion in employment?" Yardeni said.
"The long-term overall picture that emerges on the employment front is one of stagnation," said Jerry Jasinowski, chief economist for the National Association of Manufacturers. "Gains in employment have barely managed to keep pace with growth in the labor force. Manufacturing employment is below a year ago, and employment has risen only in the service sector. This is not a viable position from either an economic or a social point of view."
Meanwhile, the unemployment rate in the District jumped from 8 percent to 8.5 percent in June, the D.C. government reported yesterday. The rate for the metropolitan area rose from 3.8 percent to 4.1 percent, and the rate in the suburbs from 3.0 percent to 3.3 percent.
Economists blamed the sluggish economy for the recent consistency in the national unemployment rate. The unemployment rate was 7.4 percent when Reagan first took office in January 1981 and reached a high of 10.7 percent before falling to 7.1 percent in November 1984. It has since inched upward and has remained at the same rate since February.
However, recent economic indicators have pointed toward a resumption of moderate growth for the rest of the year, although not as robust as the administration has forecast. The administration this week forecast 5 percent growth for the rest of the year, compared with 1 percent for the first half. If that rate of growth is achieved, the administration said, unemployment will be reduced to an average of 7.1 percent for the last three months of the year.
Sen. William Proxmire (D-Wis.) said yesterday that the unemployment numbers show that the greatest fiscal stimulus in American history in terms of the annual $200 billion federal budget deficit has failed to revive the economy.
Proxmire asked Bureau of Labor Statistics Commissioner Janet L. Norwood, who was testifying before the congressional Joint Economic Committee, whether a reduction in the budget deficit, such as that agreed to by Congress Thursday night, would make the economic stagnation worse. Norwood said that large expenditures for defense have helped improve employment and helped to counteract declines in other parts of the manufacturing industry caused by the shift in purchases toward imports.
Economists said the budget deficit reduction would have little, if any, effect on the economy because the financial markets don't believe that very much was done.
"There's a lot more show than substance that came out of Washington," Yardeni said. "Most of the deficit reduction has been done with mirrors, and I think the financial markets can see right through that." If the deficit reduction package had been meaningful, interest rates would have dropped yesterday rather than risen, Yardeni said.
The unemployment rate for whites declined from 6.5 percent to 6.4 percent, although the rate for blacks increased from 14 percent to 15 percent. The rate for Hispanics also rose from 10.6 percent to 11.2 percent. The rate for teen-agers increased from 18.3 percent to 19.5 percent. The rate for women dropped from 6.7 percent to 6.6 percent, and that for men declined from 6.5 percent to 6.3 percent.
The number of people with jobs increased by 245,000, according to the Labor Department's survey of businesses. According to the government's survey of households, employment rose by 492,000 to 106.9 million. The number of unemployed rose by 38,000 to 8.5 million.
Including members of the armed services stationed in the United States, the unemployment rate remained unchanged for the sixth consecutive month at 7.2 percent.