Saturday, July 08, 2000

Jobs rise, but pace is slower

Unemployment down to 4 percent

By Jeannine Aversa
The Associated Press

        WASHINGTON — American businesses added fewer jobs than expected in June, the strongest evidence yet that the Federal Reserve is succeeding in its campaign to keep the economy from overheating. The unemployment rate fell to an almost 30-year low of 4 percent.

        “This is confirmation that the economy is giving up some of its forward momentum,” economist Ken Mayland of ClearView Economics said. “Job growth is moderating, but the labor market remains healthy.”

        Businesses added 206,000 jobs last month after cutting 165,000 positions in May, the Labor Department reported Friday.

        June's gain in private-sector jobs was offset by a loss of government jobs, including the departure of 190,000 temporary census workers. As a result, total employment including government workers rose by only 11,000, the weakest growth in four years. Many analysts were expecting total employment to grow by 293,000 jobs.

        So far this year, businesses have added an average of 177,000 jobs a month, compared with 202,000 a month for all of 1999, government analysts say.

        “It's clear that we are not creating jobs at the same rate, but it's still a healthy pace,” Labor Secretary

        Alexis Herman said. “I think it's fair to say that we are seeing signs of moderation in the economy.”

        Many economists said the tame employment report increases the odds that the Fed will leave interest rate unchanged at its Aug. 22 meeting, just as it did in June.

        “This report presents the clearest evidence yet that the economy has slowed in response to the Federal Reserve's interest rate increases ... and hopefully will give the Fed a reason to hold off again at its next meeting,” said Martin Regalia, chief economist for the U.S. Chamber of Commerce.

        But others weren't as sure.

        “The Fed could pull the trigger again ... in August just as easily as they could stand down,” John Hancock economist Oscar Gonzalez said. Economists noted that there will be plenty of economic data out between now and then, including another employment re port.

        In good news for workers, the nation's jobless rate edged down to 4 percent in June from 4.1 percent the month before — matching many analysts' expectations. In April, the unemployment rate hit a 30-year low of 3.9 percent.


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