The nation's unemployment picture brightened a bit in August in another sign that the recession may be ending, but the inflation outlook worsened as prices charged by producers continued to soar.
New figures published by the Labor Department showed that the jobless rate fell to 7.6 percent of the work force, from 7.8 percent the previous month, as a rebound in manufacturing put 200,000 back to work.
At the same time, however, a staggering 4.4 percent jump in wholesale food prices pushed the overall producer price index up 1.5 percent -- an annual rate of 20.2 percent -- on the heels of a 1.7 percent increase in July.
The combination of figures was bittersweet news for the Carter administration, which will be approaching the November election with a still high unemployment rate as well as a seeming resurgence of inflation.
Janet L. Norwood, commission of the Bureau of Labor Statistics, told Congress' Joint Economic Committee that the jobless figures showed that "the deterioration in the labor market clearly has stopped."
However, Norwood predicted that the surge in wholesale food prices would quickly show up in higher prices at the supermarket, making it likely that consumer prices will soar in the final report before the November election.
Although analysts no longer expect the jobless rate to reach the 8.5 percent mark the administration had forecast, unemployment still is high in several states crucial to the election.
The jobless rate in New York, for example, was 7.9 percent during August, while California's was 7.3 percent and Michigan's 12.4 percent. At the same time, however, Massachusetts and Texas posted rates of 5.5 percent.
The White House issued no statement on yesterday's statistics, but the president used the occasion to prod Congress on passage of his new youth-employment bill. He said joblessness among black teen-agers still is high.
The president also rejected demands by eight big-city mayors that he propose more aid to urban areas. However, Carter reportedly agreed to try to ease restrictions on housing subsidies to provide more low-rate home mortgages.
The improvement in the job figures was especially encouraging to economists because of the rebound in manufacturing, reversing a decline that had persisted all year.
The length of the average work week in manufacturing industries -- a key barometer -- surged by half an hour in August, while factory overtime shot up. Even the besieged auto industry showed signs of revival.
According to the government's monthly survey of households, the total number of jobs in the economy remained virtually unchanged between July and August. But the companion survey of actual payrolls showed the jobs total rising by 201,000, while the number of persons unable to find work fell by 188,000, to just over 8 million.
The disparity was even greater in prices of goods and materials used at earlier stages of the manufacturing process, pointing to continued sharp increases in food prices for several months to come.
Prices of food and feeds at the intermediate stage, such as flour to be used in bread-making, leaped by 9.7 percent in August, pushing the overall index at the level up a full 1 percent over the month.
And prices of raw agricultural products posted a 9 percent rise last month for the second month in a row, sending the index of crude materials prices up 5.7 percent during August.
There was an especially sharp drop in black workers' joblessness, which fell to 13.6 percent in August, from 14.2 percent in July.
Although the August increase in producer prices was large, it was concentrated largely in the volatile food price area. The rise in nonfood prices slowed to 0.7 percent over the month, from 1.1 percent in July.
Over the past 12 months, prices of finished goods ready to go to retailers had risen 14.6 percent. Although retail prices do not follow producer prices directly, they are heavily influenced by them.
The August figures on the jobless rate marked the fourth month in a row that unemployment has remained stable or declined from its 7.8 percent high. The jobless rate remained just below 6 percent for most of 1979.
Economists are divided over whether the recession actually has reached bottom.
Some analysts still are predicting that the economy won't turn around until early next year, and, in any case, most forecasts calculate that the recovery is likely to be sluggish. The jobless rate is expected to remain high through 1981.
The inflation outlook is more precarious. Most economists were hoping for some improvement in the inflation rate late this year, but this recently had been threatened by the surge in food prices.