Civilian Jobless Rate Steady in January

WASHINGTON — Civilian unemployment was unchanged at 5.3% in January for the eighth consecutive month, the Labor Department said Friday in a report that eased recessionary fears but appeared to make the economy seem stronger than it really is.

A broader measure that includes members of the armed forces living in the United States showed that the jobless rate declined to 5.2% from 5.3% in January.

Although new payroll jobs surged by an estimated 275,000--nearly twice as many as expected and a huge advance over December’s job growth of 90,000--analysts said the January figures were replete with statistical quirks that overstated the health of the economy.

The job-growth figure, which economists generally regard as more reliable than the separate estimate of unemployment, was distorted by seasonal adjustments that made the month’s unexpectedly strong showing little more than a mirage, analysts said.

The nation’s stumbling manufacturing sector, which shed 195,000 factory jobs from March to December last year, lost another 112,000 in January, the government reported.

An estimated 90,000 of those were accounted for by layoffs in the troubled auto industry, and Bureau of Labor Statistics Commissioner Janet L. Norwood noted that many of the workers affected by those shutdowns are already back on the job.

Economists were unwilling to assign too much significance to the January employment report, even though the monthly jobs survey usually is regarded as one of the earliest and most reliable snapshots of current economic activity.

“There’s too much noise here to be very useful regarding the economy,” said Bruce Steinberg, an analyst with the Merrill Lynch investment firm in New York.

“You can say that the economy is struggling, that the last quarter of 1989 is probably the weakest quarter we’ll see, that it still looks soft but not in recession,” he said. “But there’s nothing in this report you can hang your hat on.”

A separate report issued Friday on factory orders indicated that December was the weakest month in the current economic slowdown.

The Commerce Department said the indicator of future manufacturing activity increased 1.9% in December, after a 2.4% increase in November. Both months benefited from big increases in orders for aircraft, reflecting the November settlement of the 45-day strike at Boeing Co.

Excluding transportation, factory orders were up 0.2% in December, compared to 1.0% in November. Excluding the volatile defense sector, orders were up 2.5% in December and 1.8% in November. Rising factory orders generally translate into growing economic activity and expanded output several months down the line.

The employment report contained a positive sign on the inflation front. Despite the large increase in new jobs, average hourly wages gained only 0.1% for the month. A 0.5% increase in December had rekindled fears that rising employment costs would fuel accelerating inflation.

Average hourly wages in January were a moderate 3.7% higher than in January, 1989, comfortably below the 4.6% rate of consumer price inflation recorded last year.

In California, civilian unemployment, excluding the armed forces, was estimated at 5.2% in January, virtually unchanged from December’s 5.3%.