Economy Seems Stuck in First Gear; Unemployment Rate Declines, but Administration Revises 1993 Growth Projection
In two signs of the nation's continuing but slow economic recovery, the unemployment rate dipped to 6.8 percent in July, the lowest level in 22 months, as President Clinton's top economist significantly lowered the administration's estimate for economic growth this year.</br></br>Laura D'Andrea Tyson, chairman of the president's Council of Economic Advisers, said yesterday that the economy would grow at a rate of about 2.1 percent this year - a full percentage point below the administration's April projection of 3.1 percent.</br></br>Tyson made the new forecast while discussing yesterday's Labor Department report that the jobless rate dropped 0.2 percentage point in July from June as business employment increased by 162,000 jobs.</br></br>Analysts pointed out that the drop was really closer to 0.1 percent - the larger number results from rounding up, according to the Labor Department report.</br></br>"I don't think anyone should conclude from this that the economy is off on some kind of tear," said Donald H. Straszheim, chief economist at Merrill Lynch & Co. in New York. "The economy is still growing, albeit slowly. We're not likely to fall back into recession, but job opportunities remain scarce." "Not a boom, but at least an expansion," said David Wyss, an economist at DRI/McGraw-Hill Inc. in Lexington, Mass.