The unemployment rate fell to 7.9 per cent in December as the number of people holding jobs rose by 222,000 to a record 88.4 million, the Department of Labor reported yesterday.
Economists said the December improvement in the jobs picture was due to a resumption of economic growth after an eight-month pause and the ensuing pickup in retail sales and industrial production in November and December.
Nevertheless, the umemployment rate, at 7.9 per cent, and the total number of jobless, 7.56 million, remain "stubbornly high," according to Commissioner of Labor Statistics Julius Shiskin.
In another development, the Labor Department also announced that wholesale prices, a precursor of prices consumers eventually must pay rose 0.9 per cent in December, because of a big 3.7 per cent jump in farm products. (Details on Page D11.)
But industrial commodities, which had been rising rapidly since July, slowed their rate of increase from 0.8 per cent in November to 0.3 per cent in December.
Economists are more concerned with month-to-month changes in industrial prices because they are more indicative of the underlying trend of inflation than are changes in food prices, which move up and dwon eratically, even after adjustment for seasonal variation.
The Labor Department said that 177,000 of the 222,000 increase in those holding jobs were adult women. Most of the decrease in unemployment occurred among adult men since many of them simply left the labor force and stopped looking for a job.
Joblessness had declined to 7.3 per cent last May, but the slowdown in economic growth which began last spring pushed unemployment back up til it reached 8.1 per cent in November.
The December jobs report shows that the Ford administration was far off on its prediction of the course of the unemployment rate in 1976. After sharp drops in unemployment last winter, administration economists predicted the unemployment rate would fall to 7 per cent or lower by year's end, a prediction they stuck to as late as last fall when unemployment was rising.
By contrast, it appears that the administration will meet or exceed its goal of reducing the consumer inflation rate to between 5 and 6 per cent by the end of 1976. In 1975 it was 7 per cent and in 1974 it was 12.2 per cent.
The unemployment rate is the percentage of the labor force that is unemployed. The work force is the sum of those who are employed and those who are actively seeking work.The rate is adjusted to account for seasonal variation.
The unemployment rate can fall because people drop out of the work force, even though no one new finds a job and it can rise even though many people find jobs if the number of people who start looking for work rises even faster.
Both happened last month. The unemployment rate among adult men fell from 6.5 per cent to 6.2 per cent because many men stopped looking for work.
Although more adult women were at work in December than in November, nearly 160,000 more women were looking for work in December, so the unemployment rate for adult women fell only slight, from 7.7 to 7.6 per cent.
The Labor Department said that the unemployment rate for most other groups, including blacks and teenagers, remained about the same in December.
The teenage unemployment rate was 18.9 per cent, down from 19 per cent, while the black unemployment rate was unchanged at 13.6 per cent.
Shiskin, testifying before the congressional Joint Economic Committee, said that over the last two months nearly a half million persons have found jobs and over the year total employment rose 3 million.
John W. Kendrick, chief economist for the Department of Commerce, noted one disturbing element in the jobs report - that those unemployed 26 weeks or longer rose by 50,000 in December.
The unemployment statistics are developed from a monthly survey of about 47,000 households. Another Labor Department survey of employer payrolls - less comprehensive, but generally considered more accurate - showed an increase of 255,000 workers. Payroll employment grew 2.2 million in 1976.
The department also reported that the number of discouraged workers who dropped out of the labor force because they felt they could not find a job increased from about 800,000 persons in the third quarter to 1 million in the fourth quarter.
In a related development, the Urban League said that the true unemployment, the Urban League said that the true unemployment rate for black workers - including discouraged workers and those working parttime who want to find fulltime jobs - is 25 per cent, based on as 107-city survey.