The nation's civilian unemployment rate dropped from 7 to 6.9 percent in December, its lowest level in nearly six years, the Labor Department reported yesterday.
The unemployment rate, which was 7.4 percent at the start of 1985, averaged 7.2 percent over the year, the lowest average during the Reagan administration. The rate was 7.5 percent when President Reagan took office and rose to a postwar high of 10.7 percent exactly three years ago.
During 1985, the unemployment picture improved for women, men and whites, but it did not improve for blacks, teens and Hispanics, the Labor Department said. The number of people without jobs dropped very little, remaining at 8 million, and another 1.2 million were too discouraged to look for work, a level that prevailed most of the year, according to the Labor Department.
After losing 325,000 jobs between January and September, the manufacturing sector began to add workers at the end of the year, according to the Labor Department. However, manufacturers, whose problems were blamed on import competition, were still down 180,000 jobs since the end of 1984.
"With this strong yearend finish, we can reasonably expect to exceed the administration's forecast of a 6.7 percent average unemployment rate for 1986," White House spokesman Larry Speakes said.
Many private economists said the employment figures indicated that the economy will grow moderately through early 1986, because more people with jobs suggests that more Americans will spend money and keep the economy active.
However, not everyone was pleased by the unemployment report.
"It is good news that the official unemployment rate has dipped below 7 percent for the first time since the Reagan administration took office," the AFL-CIO said. "But the fact remains that 8 million American workers are still trapped in the longest and deepest unemployment crisis since the Great Depression, and more than 5 million of them are getting no help whatever from their government" in the form of unemployment benefits.
Last month, 240,000 jobs were created, mostly in services, bringing the number of working Americans to 108.2 million, according to a Labor Department survey of households. A poll of businesses -- a more reliable survey -- showed that 320,000 jobs were created last month.
In 1985, there were 3 million jobs added to nonfarm payrolls, with strong gains in business and health services, construction and retail trade. Growth was especially good in eating and drinking places and food stores, according to Janet L. Norwood, commissioner of the Bureau of Labor Statistics.
Since October, manufacturing industries have gained 140,000 jobs. "Despite the improvement over the last quarter of the year, nearly a dozen manufacturing industries lost jobs last year, with the largest decreases occurring in primary metals, fabricated metals, nonelectrical machinery, electrical and electronic equipment, textile mill products and chemicals," Norwood said.
Black unemployment, which ended the year at 14.9 percent, "continues to be especially intractable," Norwood said. "Despite a healthy over-the-year employment gain of 255,000, the black jobless level showed no improvement, as their labor force also expanded."
Overall, the figures released yesterday suggested renewed strength in the economy, particularly in the import-battered manufacturing sector, although wages increased sharply, economists said.
"Across the board, we have strength," said David Jones, economist for Aubrey G. Lanston, a securities firm. The sharp increase in jobs in December "means more money in workers' pockets that's available to spend."
As far as manufacturing goes, "The drag from the foreign trade deficit is no longer as severe as it was in early 1985 and 1984," Jones said. "It appears we're beginning to climb out of the deep hole that the trade deficit has put us in." "The economy created a lot of jobs in 1985, primarily because the service economy was not battered by high interest rates and trade problems," said Jerry Jasinowski, chief economist for the National Association of Manufacturers. "Despite the slow-growth picture for the economy in 1986, unemployment could dip a bit more for two reasons: the continuing growth of the more-labor-intensive service industries and the slowdown in the growth of the labor force."
The unemployment figures also contained other indications of an improved economic picture, analysts said. The factory workweek increased 0.3 hour to 41 hours, for example, "a very high level for this leading economic indicator," Norwood said.
"The index of aggregate weekly hours in the nonfarm economy -- a measure that reflects changes in both employment and hours -- rose 0.7 of a percent to 118.3, the highest level ever recorded," Norwood said. The manufacturing index increased "even more sharply, but at 95.2, was below its year-ago level and well below the 1979 mark," she said.
The unemployment rate in December was the lowest since April 1980, when it was 6.9 percent, Labor said. The unemployment rate last month, including members of the armed forces stationed in the United States, dropped from 6.9 to 6.8 percent.
In December, the unemployment rate for men dropped from 6 to 5.9 percent, while the rate for women declined from 6.4 to 6.2 percent. The rate for teens rose from 18.4 to 18.8 percent.