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UNEMPLOYMENT HOLDS AT 4.9% AS JOB GROWTH IS MODERATE

The economy squeezed out relatively few new jobs in September, leaving the nation's unemployment rate unchanged at 4.9 percent. That pleased some experts who are worried about inflation, but some analysts saw problems ahead with a shortage of qualified workers.

September's seasonally adjusted unemployment rate matched the August rate, just a shade above the 4.8 percent of July and May, which had been the lowest since 1973, the Labor Department said today.

President Clinton said, "We have the most solid American economy in a generation, with strong investment, low unemployment and low inflation."

Employers added 215,000 jobs to their payrolls in September, up from a paltry 40,000 in August, the fewest in 11 months. However, the United Parcel Service strike and an early return of many school employees skewed both numbers.

The strike cut 162,000 jobs from the August figure and its settlement added an equal number in September.

Fed was worried about UPS strike

WASHINGTON (AP) -- Federal Reserve policy-makers were worried in August that the United Parcel Service strike might signal a more militant work force demanding inflationary increases in wages, according to minutes released Thursday.

At the end of a 3 hour, 40 minute private meeting Aug. 19, the Federal Open Market Committee voted 10-0 against an immediate increase in short-term interest rates.

The panel decided to bias a future-looking policy directive toward higher rates but never acted on that directive. The minutes showed policy-makers were particularly worried that strong demand for labor, reflected in unemployment rates of less than 5 percent, would push up wages and, eventually, consumer prices.

Continental pilots to reject pact

HOUSTON (AP) -- Continental pilots are ready to reject a contract offer on the table from the carrier, saying it does not bring pilots' pay up to industry standards.

"We expect the board to reject the offer because it is totally unacceptable," said Ray Abernathy, spokesman for the Independent Association of Continental Pilots.

The offer was being sent to the union's board of directors Thursday.

The official announcement on the board's decision will be made early next week, Abernathy said.

Oil futures increase sharply

NEW YORK (AP) -- Crude oil futures rose sharply Thursday after Iraq turned away United Nations weapons inspectors, raising concerns of U.N. retaliation.

Crude oil futures topped a Jan. 15 high on the New York Mercantile Exchange after Iraq barred the inspectors from entering suspected illegal weapons sites on three successive visits. The news prompted speculation sanctions, such as a halt to oil exports, could be imposed.

November crude rose 72 cents to $21.77 a barrel. The gains also boosted crude products. November heating oil rose 1.61 cents to 59.80 cents a gallon; November gasoline rose 1.53 cents to 61.43 cents a gallon.

Mortgage rates up slightly in week

WASHINGTON (AP) -- Average interest rates on 30-year, fixed-rate mortgages rose to 7.31 percent this week, a slight increase from the previous week's 19-month low of 7.28 percent, Freddie Mac said Thursday.

Fifteen-year mortgages, a popular option for refinancing, averaged 6.87 percent this week, up from 6.86 percent.

On one-year adjustable-rate mortgages, lenders were asking an average initial rate of 5.52 percent, up from 5.51 percent.

In other business news

Defense giant Raytheon Co. will be able to buy Hughes Aircraft Co. from General Motors under an antitrust agreement reached Thursday with the Justice Department. Under the agreement, Raytheon must sell two defense electronics businesses and establish business "firewalls" to preserve competition for a new Army antitank missile.

Mitsubishi accused the U.S. Equal Employment Opportunity Commission Thursday of distorting facts and misleading the public about sexual harassment at a company factory, continuing the public sniping between the two sides.

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