Unemployment Eased to 7.3% In February --- Gain in Service Industries Offset a Steep Decline In Manufacturing Jobs
WASHINGTON -- The February decline in the unemployment rate masks continuing problems among the nation's manufacturers.</br></br>The civilian unemployment rate dropped to 7.3% of the work force last month from 7.4% in January, the Labor Department said. But it took a large rise in services employment to offset substantial declines in manufacturing and construction employment, according to the department's survey of business payrolls. The average hours of factory workers also dropped, to 40.0 a week from 40.6. Together, the numbers suggest industrial production actually fell in the month.</br></br>Analysts believe some of the decline in manufacturing and construction may have been tied to harsh weather during February. But the numbers also seem to suggest that manufacturers have yet to fully recover from the sluggish growth that occurred in last year's third quarter.</br></br>"The decline in manufacturing reflects the overbuilding of inventories in late 1984 and increased import penetration as a result of the rapid escalation of the dollar," said Jerry Jasinowski, chief economist of the National Association of Manufacturers.</br></br>Companies should be able to work off excess inventories in the next month or two. But the problems that manufacturers face as a result of the strong dollar can be expected to continue throughout the year. A strong dollar increases imports by lowering the prices of foreign products, while making U.S. products more costly for overseas buyers.