Joblessness Falls for 3rd Month as Slide in Manufacturing Ends : Drop Seen as Sign of Long-Awaited Industrial Upturn

WASHINGTON â€”  The nation’s unemployment rate, falling for the third straight month, dropped one-tenth of a percentage point to 6.8% in August as a half-year slide in manufacturing employment ended, the government said today.

Private economists hailed the report as the first significant evidence of a long-awaited upturn in the economy after generally sluggish performance for more than a year.

Employment rose to a record 110,155,000 as 240,000 to 275,000 jobs were created last month, the Labor Department said.

Although the decline was only 0.1%, when coupled with decreases twice that size in June and July, unemployment has dropped 0.5% since May.

“One month’s report does not make a trend,� said Allen Sinai, chief economist for Shearson Lehman Bros., a New York investment house. “But this is the strongest report we have seen in the past year or so. It suggests that manufacturing has seen its worst days and that we may be reaching the point where economic growth is going to pick up.�

‘Still a Lot of Weakness’

Martin Mauro, an economist for Merrill Lynch, the Wall Street brokerage firm, agreed that the unemployment figures suggest that the economy is doing better than some forecasters had predicted.

“It probably means that industrial production is stronger than previously thought,� Mauro said. “But I don’t think this means that we’ve really turned the point in the economy. There still is a lot of weakness; we’re still seeing some severe leakages in imports.�

The largest job gains last month were recorded for business and health care services, in which 65,000 jobs were created. Construction jobs were up 55,000, a figure that matched the July gain.

But the best news was in manufacturing jobs. The department’s monthly survey of business establishments showed such employment rising for the first time since January, adding 19,000 jobs to bring total factory employment to 19,135,000. About 350,000 factory jobs had been lost through July.

‘A Welcome Change’

“This is a welcome change from the string of successive job losses we experienced� earlier in the year, Janet L. Norwood, the commissioner of labor statistics, said in testimony prepared for the congressional Joint Economic Committee.

“Moreover, almost 60% of the industries . . . had employment increases over the month,� she added, noting that overtime averaged 3.5 hours per week in factories, another positive employment sign.

Job losses in the ailing oil and gas industry, however, surged again last month. The Bureau of Labor Statistics said 10,000 workers lost their jobs in August, contrasted with a decline of 4,000 in July. In the first half of the year, industry losses had averaged 20,000-25,000 a month.

The department said the overall employment growth was concentrated among white workers. The unemployment rate for whites fell from 6.0% to 5.8%. The rate for adult men was down from 6.2% to 5.9%.

The jobless rate for black workers rose from 14% to 14.6% after declining from 15.1% in June.