Gloom About Jobs

Economists knew that the November job statistics would be bad, but when the Government released the figures at week's end they were far worse than expected. Unemployment jumped to 6.5% of the labor force, from 6% in October, the sharpest one-month rise in 13 years; the jobless rate is now higher than in any month since October 1961. Until November, employment and unemployment had both been rising, but last month the number of people who have jobs fell by 800,000. The news helped send the stock market reeling to another twelve-year low. The Dow Jones industrial average tumbled 41 points during the week, to a close of 578. The Federal Reserve moved to help the economy by making borrowing easier; it dropped the discount rate on loans to member banks from 8% to 7 3/4%.

There was one hopeful job development: members of the United Mine Workers voted to accept a contract that will raise wages and benefits 54% over the next three years. The end of their 24-day strike will avert many layoffs in coal-using industries. But enough workers are being furloughed anyway to keep unemployment climbing. Alan Greenspan, chairman of the Council of Economic Advisers, now predicts that the unemployment rate will peak at "something over 7%" next summer.

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