More find work, unemployment rate remains low

WASHINGTON (AP) -- The largest number of jobseekers in four years found work in March, propelled by a big burst in hiring for the<br>census and other temporary factors. The nation's unemployment rate

Friday, April 7th 2000, 12:00 am

By: News On 6

WASHINGTON (AP) -- The largest number of jobseekers in four years found work in March, propelled by a big burst in hiring for the
census and other temporary factors. The nation's unemployment rate stayed close to a three-decade low at 4.1 percent.

Spurred in part by the supercharged economy, employers added 416,000 jobs to their payrolls last month -- the largest number since 454,000 jobs were created in February 1996, the Labor
Department said Friday.

"This is a strong labor market for anyone who is looking for a job today and skills are the ticket to the future," said Labor Secretary Alexis Herman.

Even with the strong growth in jobs, the unemployment rate was unchanged from February, with both months just a tick up from the 30-year low of 4 percent reached in January.

A number of special factors boosted payrolls, including the hiring of 117,000 temporary census workers and a rare, longer-than-usual interval between the February and March
employment surveys, which allowed more jobs to be counted in March, government analysts said.

Excluding these special factors, job growth was roughly in line with the average monthly gain for 1999, government analysts said.

Some economists estimated that after adjusting for these factors, the number of jobs created in March would have been around 250,000, still indicating brisk job growth.

"Even if you strip away the special factors, you have very healthy job growth," said Mark Zandi, an economist with RFA Dismal Sciences. "Strong job growth indicates that the economy continues to expand robustly adding plenty of jobs and keeping everyone who wants a job employed."

Given that, economists said Friday's unemployment report reinforces their belief that the Federal Reserve will boost interest rates again on May 16, probably by a quarter of a percentage point.

"While I don't see any obvious danger, I still expect Fed Chairman Alan Greenspan to turn the monetary screws a bit tighter in May," said Bill Cheney, chief economist for John Hancock.

The Federal Reserve has raised rates five times since June 30 to slow the red-hot economy and keep inflation from escalating.

Fed Chairman Alan Greenspan defended these rate increases Friday, saying they were necessary to keep inflation at bay. While
expressing optimism that the recent upsurge in productivity gains -- which bodes well for helping keep inflation low -- could be
maintained, Greenspan said the central bank still needs to keep the strong economy from triggering rising cost pressures.

Meanwhile, a key gauge of inflation pressures, average hourly earnings, rose 0.4 percent to $13.60 in March, following the same-size gain reported the month before. Some economists said this could be a sign that wage pressures are beginning to pick up.

While strong wage and job growth is good for workers, economists and members of the Federal Reserve worry that the combination might rekindle inflation. Their shared concern: employers, scrambling to find workers, recruit them with big boosts in wages and benefits,
increased costs that could be passed along to consumers as higher prices.

On Wall Street, investors took the report in stride. The Dow Jones stock average fell 2.79 to close at 11,111.48, while the Nasdaq posted it's biggest point gain ever as investors snapped up stocks with strong prospects for earnings growth. The index rose 178.89 to 4,446.45, topping its previous record point gain, 168.21, set Feb. 22.

In another report, Americans rang up an unexpectedly large $12 billion in consumer debt in February reflecting heavy credit card
use and robust borrowing for everything from cars to vacations, the Federal Reserve said. In January, consumer credit surged by a record $18.2 billion -- larger than the Fed estimated one month ago.

With plentiful jobs, rising incomes and stock market gains, consumers are in the buying mood, economists said.

March's big jump in jobs followed a month of sluggish growth. In February, just 7,000 new jobs were created, much weaker than the
43,000 previously reported.

In March, the service sector, the driving force of job creation in the United States, added 328,000 jobs. The government added 142,000 jobs, led by the hiring of the 117,000 census workers, and construction companies added 89,000 workers. Manufacturing, meanwhile, lost 5,000 jobs.

With businesses having trouble finding qualified workers, the Labor Department will hold a summit Tuesday to help jobseekers
acquire needed skills. Greenspan, businesses leaders and others will be there.
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On the Net:
The employment report: http://stats.bls.gov/newsrels.htm