5.8% Jobless Rate Is Lowest in Eight Years

WASHINGTON — A buoyant economy, paced by increases in manufacturing jobs, trimmed the nation’s overall unemployment rate in September to 5.8%, the lowest level since 1979, the Labor Department reported Friday.

As the business expansion nears its sixth year, the growth in jobs continues to be surprisingly robust. Manufacturing is recovering from its doldrums and the falling dollar is making American products cheaper on world markets.

Unemployment, down from 5.9% a month before, is falling without producing the threat of inflation that usually appears when labor markets get tight. “I don’t see any evidence yet of upward pressures on wages,” said Janet L. Norwood, commissioner of labor statistics.

California’s jobless level was 5.8% last month, up from 5.4% in August. However, the increase is not considered significant because the state figure, based on a relatively small survey, is always more volatile than the national number.

Friday’s upbeat news was welcomed at the White House, where spokesman Marlin Fitzwater said: “The improvement shows economic expansion is continuing with 59 months of consecutive growth.”

The current boom is distinctly different from the previous expansion, which ran from 1975 through 1980. The earlier one was marked by huge growth in factory jobs and a surge in the labor force as millions of baby boom children reached adulthood and working age.

Today’s expansion “reflects the restructuring of industry, which accelerated during the 1980s,” Commissioner Norwood said at a hearing of Congress’ Joint Economic Committee. Industrial firms, pressed hard by foreign competition, increased efficiencies and trimmed payrolls, she said.

Service Industries Boom

Meanwhile, service industries were booming, creating millions of white-collar jobs, and the labor force has grown far more slowly because there are fewer teen-agers coming into the work force.

The unemployment rate is being driven down because the number of jobs is increasing at a rapid clip but the number of workers isn’t.

Employment rose an impressive 2.8 million during the last 12 months, and the industrial part of the economy apparently has revived, joining the service sector in generating new jobs.

“The recent surge in manufacturing employment should put to rest once and for all the myth that Aerican manufacturing is dead,” said Richard W. Rahn, vice president and chief economist of the U.S. Chamber of Commerce. Factory jobs jumped by 55,000 in August and 165,000 in the last three months, according to the Labor Department.

Moderate Inflation Seen

In November, 1979, the last time the jobless rate was as low as 5.8%, the economic climate seemed much more threatening and uncertain for consumers and businesses. Inflation was rampant and prices soared 13.3% during 1979. By contrast, the cost of living is expected to climb a moderate 4% or 5% this year.

This suggests that the economy can keep growing at a healthy pace, cutting unemployment without heating up inflation to dangerous levels. “We’ve still got a long way to go” before prices begin accelerating, said Jeff Faux, president of the Economic Policy Institute, a liberal research organization.

A revival of dangerous inflation seems remote because wages, the biggest single cost item for business, are rising very slowly.

The nation’s overall jobless rate of 5.8% covered civilian workers and members of the military. A separate index for the civilian labor force showed an unemployment rate of 5.9% in September, down from 6% in August.

114.5 Million Hold Jobs

There were 114.5 million Americans working last month and 7.1 million unemployed. California had 13 million residents on the job, with 797,000 unemployed.

“Labor market developments remain encouraging,” Norwood said.

Despite the steady growth in jobs, unemployment is still much higher than the national level for blacks, Latinos and teen-agers. The jobless figures in September included: adult men, 5%; adult women, 5.4%; whites, 5.1%; blacks, 12.3%; Latinos, 8.2%, and teen-agers, 16.3%.