Unemployment dips back to 29-year low
September 2, 1999
WashingtonWashington — The nation's unemployment rate dipped back down to a 29-year low of 4.2 percent in August as gains in computer, data processing and health care jobs helped offset continued job losses at factories. — The nation's unemployment rate dipped back down to a 29-year low of 4.2 percent in August as gains in computer, data processing and health care jobs helped offset continued job losses at factories.
Washington — The nation’s unemployment rate dipped back down to a 29-year low of 4.2 percent in August as gains in computer, data processing and health care jobs helped offset continued job losses at factories.
The Labor Department reported today that the decrease in August’s unemployment rate followed a 4.3 percent rate in July. Despite the decline in the unemployment rate, employers added a smaller-than-expected 124,000 jobs to their payrolls in August, following a gain of 338,000 jobs in July.
Meanwhile, average hourly earnings, a key gauge of inflation pressures, grew a tiny 0.2 percent to $13.30 in August, a 3.5 percent increase compared to a year ago. That was the third straight monthly rise, but slightly slower than 0.3 percent increase in July.
While low unemployment and strong wage growth appear to be good developments for workers, economists worry that it’s a recipe for sparking inflation. Their fear: Employers scrambling to find workers woo them with higher wages and benefits, costs likely to drive up consumer prices if not constrained by other forces.
But August’s slowdown in the growth of average hourly earnings combined with the 0.3 downward revision for wage growth in July and calmed some economists’ fears that inflation could ignite. That, along with August’s slower job growth, economists said, could forestall the Federal Reserve from raising interest rates again in October.
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”This should relieve some of the Fed’s worry about inflation and too-strong job growth,” said David Wyss, economist with Standard and Poor’s DRI.
Last week, the Federal Reserve raised interest rates for the second time this year and hinted no additional rate increases may be necessary unless the economy show signs of overheating or if inflation breaks out.
Financial markets have been on edge in recent sessions amid continuing fears among investors that the Fed hasn’t yet completed its efforts to ward off inflation by imposing higher ind immediately pushed yields on 30-year Treasuries down to 6.03 percent this morning from 6.13 percent late Thursday. At midmorning, the Dow Jones industrial average was up more than 150 points.
In August, the number of service sector jobs increased by 132,000, led by gains in computer services which grew by 15,000 jobs. Doctors offices, hospitals and other health-care facilities added 19,000 new jobs.
However, overall retail employment held about steady. Bars and restaurants dropped 38,000 jobs, but car dealers and furniture stores helped offset that decline.
Manufacturers, still feeling the lingering affects of the global financial crisis, cut 63,000 jobs in August.
Meanwhile, construction jobs declined by 29,000, largely offsetting gains in the previous two months.
Minorities and women continue to face higher unemployment than white Americans and men.
In August, the unemployment rate for blacks was 7.8 percent, lower than July’s rate but still more than double the 3.7 percent rate for whites. The August unemployment rate for Hispanics was 6.5 percent.
The unemployment rate for all women was 4.3 percent in August compared to 4.1 percent for all men.
The unemployment rate for teen-agers was 13.5 percent, rising slightly as many left summer jobs to head back to school.