Labor Force Decline Sends Jobless Rate to Decade-Low 5.6%

WASHINGTON â€”  A sharp decline in the size of the American labor force last month sent the unemployment rate to a decade-low 5.6%, the government said today.

While the number of people at work in March dropped 306,000, those either holding jobs or looking for them fell 445,000. The 0.1 percentage point drop from February’s 5.7% jobless rate reflected a decrease of 137,000--to 6.8 million--in the number of workers listed as unemployed.

The 5.6%, seasonally adjusted, rate is the lowest since May, 1979, and has not been lower since 1974, the Labor Department reported.

California’s jobless rate declined to 5% last month, down from 5.4% in February.

Janet L. Norwood, the U.S. commissioner of labor statistics, said a slowdown in the expansion of the labor force nationwide is beginning to be reflected in unemployment rates, which had, until last month, been dropping more on the basis of job growth.

“The birthrate decline in the 1960s and the early 1970s has resulted in fewer young people reaching labor force age in the 1980s,� she said.

While the number of Americans at work has grown 3 million over the last year, “the labor force has increased by less than 2 million,� she told the the congressional Joint Economic Committee.

End to Job Boom Seen

Even though the unemployment rate has fallen a full percentage point from March, 1987, the latest government data indicates that the job boom may be coming to an end.

The number of so-called “discouraged workers�--people who have given up the search for a job out of the belief they cannot find one and are not included in the labor force or jobless rate calculations--rose by 115,000 in the first three months of 1988 to 1.02 million after falling by more than 200,000 last year.

Two-thirds of the increase in discouraged workers was adult men, historically the primary family breadwinners.

Factory employment, which had soared through the last half of 1987, was stagnant for the second month in a row in March.

At 19.4 million workers, manufacturers actually had 1,000 fewer people on their payrolls than in February. Factory employment, however, is still more than 420,000 above where it was a year ago.

Job increases in machinery and printing and publishing were offset by small declines in 11 other manufacturing industries, Norwood said.

Despite what appears to be an end to the manufacturing rebound, total payroll employment grew by 260,000 last month, according to a Labor Department employer survey.

Upsurge in Housing Market

The unemployment rate calculations are based on a sampling of the nation’s households.

Health care and business services provided 85,000 of the new jobs, with construction adding 80,000 more. The growth in construction jobs plus a jump of 10,000 people on real-estate agency payrolls affirm earlier indications of a resurging housing market.

Things are not so good in banking and on Wall Street, however, with employment dropping by 5,000 last month. It was the second straight monthly decline.

Retail trade employment was flat last month after rising by 250,000 workers in January and February.

The jobless rate for whites fell from 4.8% to 4.7% while rising from 12.6% to 12.8% for blacks. The rate for Latinos dropped from 8.3% to 8.2%.

Joblessness among men was unchanged at 4.9% but dropped among women from 5.2% to 4.8%.

The rate for teen-agers rose from 15.4% to 16.5%. Black teens saw their rate drop from 38.3% to 36.9%.