The Michigan Daily-Saturday, August 2, 1980-Page 5 ECONOMISTS SA Y WORST IS OVER Unemployment rises slightly From AP and JPI The nation's unemployment rate - defying many predictions - rose only slightly in July, hitting the 7.8 per cent level it had reached two months earlier, the government said yesterday. Many economists viewed this as new evidence the worst of the recession is over. Moreover, the Labor Department reported that the number of Americans holding jobs rose in July for the first.. time in five months. DESPITE THE encouraging figures, however, government officials and Carter strategy to include industry tax relief WASHINGTON (AP) - Treasury Secretary G. William Miller said yesterday that any new Carter ad- ministration strategy to revitalize the economy will include special tax relief for the nation's battered industrial sec- tor. Miller, however, refused to confirm or deny reports that Carter will unveil a. major new economic policy next week in a move to counter the tax cut plan proposed by Republican presidential nominee Ronald Reagan. WHITE HOUSE press secretary Jody Powell said yesterday he did not know when the economic package would be announced. "There have not been decisions made about the contents of some package," he said. The press secretary said that ad- ministration officials are in the process of consulting within the administration and on Capitol Hill about "the economic situation and what steps might need to be taken." Meanwhile, House Speaker Thomas O'Neill Jr. told reporters, "The president is going to make a major ad- dress to some group next week on his program for revitalization of the economy." . BUT O'NEILL refused to elaborate on what would be in the new package. Other congressional sources said the plan might be unveiled next week without a formal presidential speech. However, they added that Carter would probably elaborate on his proposal at the Democratic National Convention, which begins Aug. 11. The sources said top administration officials, including Miller, discussed their plan to propose a new, long-range economic strategy with House Democratic leaders Thursday. The sources added, however, that few details were disclosed. The possibility that Carter might an- nounce a new economic strategy comes at a time when the administration is on the defensive against Republican at- tacks blaming Carter policies for a recession and high levels of inflation. The sources, who asked not to be identified, said White House officials are particularly upset over Reagan's $36 billion tax cut plan, which they con- tend is irresponsible. private economists cautioned that the unemployment rate would continue to creep up in coming months, peaking at about 8.5 per cent late this year. July's rate increased 0.1 per cent over June's 7.7 per cent level, a figure which economists had attributed to seasonal distortions in the work force count. The rate had jumped 0.8 per cent in both April and May. Sar Levitan, a labor economist who directs the Center for Social Policy Studies, called July's figure "sur- prising" and said he had expected it to exceed eight per cent. "EVEN THE most optimistic economists anticipated a higher rate," hesaid. Treasury Secretary G. William Miller said yesterday the jobless figures since May "show we are at a plateau." He told Congress' Joint Economic Committee, "We believe we are bottoming out" of the recession, although economic recovery has yet to begin. Janet Norwood, commissioner of the Bureau of Labor Statistics, appeared a bit more conservative than Miller. EMPLOYMENT DECLINES have leveled off, she told Congress, but "the signs are not yet strong enough to suggest a trend." The stable unemployment picture comes in the wake of other encouraging economic news. The government repor- ted earlier this week that the Index of Leading Economic Indicators - a closely watched barometer of the economy - rose 2.5 per cent in June, compared with declines of 2.3 per cent and 3.9 per cent the two previous mon- ths. Moreover, housing starts climbed by 30 per cent in June and auto sales have shown some improvement from their dire levels of recent months. CHARLES SCHULTZE, chairman of President Carter's Council of Economic Advisers, said the week's reports should bolster opposition to enactment of a tax cut before the November elec- tions. That view was supported by several private economists, including Otto Eckstein, head-of Data Resources Inc., which advocates a tax reduction as quickly as possible. "This kills a 1980 tax bill. There's no way Congress is going to act before the election," he said. ECKSTEIN SAID July's figures "are better than expected and show that the worst slide is clearly over." But, he warned, "it would be blind op- timism to believe unemployment won't worsen in coming months" because many businesses will continue to keep inventories low in response to lagging demand. The slumps in the auto and housing in- dustries are past, he said, but the recession has yet to work its way through other sectors of the economy. LEON TAUB, a- senior economist with Chase Econometrics Associates, said the rate- of layoffs will subside somewhat, but unemployment stillwill increase because more people will be entering the labor force than can be ac- commodated. The jobless rate of 14.2 per cent last month for black and other minorities was the highest since August 1977, when it was the same rate. That compared to 13.6 per cent for minorities in June. The jobless rate for teen-age blacks and other young minority workers in- creased by 2.2 percentage points during July toa two-year high of 36.6 per cent.