WASHINGTON - There's a fair chance the Federal Reserve will move again to trim short-term interest rates if the economy continues to drag along in low gear, financial analysis said Friday.

Some analysis, while not expecting the Fed to move right away, said they will be watching for another cut in the federal funds rate to 3% from 3.25%.

Their comments came after the Labor Department reported that job markets improved slightly in July as the civilian unemployment rate slipped to 7.7% from 7.8%, according to the department's household survey.

A separate survey showed non-farm payroll jobs increased 198,000 with the help of a surge in the ranks of teenagers who got summer employment from emergency federal funding. Revised June nonfarm payrolls fell 63,000, which was about half of the 117,000 decrease reported last month.

"It's not inconsistent with the Fed to take additional action," said John Godfrey, chief economist for Barnett Banks Inc., in Jacksonville, Fla. "It wouldn't surprise me if they acted."

The near standstill pace of growth in money and credit adds to the case for a move by the central bank, other analyst said. Treasury Secretary Nicholas Brady last week complained in public that Federal Reserve Board Chairman Alan Greenspan and his colleagues are not doing enough to boost the money supply, which is well below the central bank's target ranges.

President Bush, meeting with reporters at the White House, urged them to write positives stories about the economy. "Now, you can help by putting a nice, positive interpretation on the fact that there are 200,000 more jobs created," said Mr. Bush, apparently referring to the July increase in civilian employment.

"And please do it, because it's only fair that the American people understand that every once in a while something reasonably good happens," said Mr. Bush, who earlier this week expressed frustration with media coverage of the economy.

"Interest rates are down and inflation is down, and we are poised for a strong recovery," said the president. "And we've been growing, albeit anemically."

Economists agree that the inflation figures and interest rates are something to cheer about. Still, in picking over the employment figures, analysts said they could make a case for at best a mild improvement in labor markets and the economy in general.

"The economy remains soft," said David Wyss, senior analyst for DRI/McGraw-Hill, the forecasting firm in Lexington, Mass. "It had a spurt of growth in the beginning of the year, and then it stalled out in the spring, and it looks to be getting a little steam in the summer, but not much so far."

Mr. Wyss, who has criticized the Fed for moving too cautiously in cutting rates, said, "If I were at the Fed, I'd cut another time. Things look awfully soft out there, and I don't see any danger in cutting rates again. It might do a little good."

Still, Mr. Wyss noted, because the Republican National Convention is scheduled to begin Aug. 17, Fed policymakers have to be wary of appearing to adjust rates with the political motivation of helping out an incumbent administration. "It depends on how political they want to be."

The so-called beige book, the Fed's survey of business conditions in the 12 district banks that was released last week, was more somber in tone than the earlier report of June 17.

Since the June report, however, the Fed has cut the discount rate to 3%, and some analysts say policymakers will not be inclined to adjust rates any time soon. "We do not expect any major monetary policy changes between now and year-end," said Elliott Platt, director of economic research for Donaldson, Lufkin & Jenrette Securities Corp., in the firm's latest market letter. "This will leave the discount rate and the funds rate in December at 3% and 3.25%, respectively."

The Federal Open Market Committee is scheduled to meet Aug. 18. Meanwhile, the bond market is looking ahead to this week's quarterly auction of $36 billion in notes and bonds.

According to Labor Department officials about two-thirds of the 92,000 increase in local government jobs came from teenagers who got work from additional funding under a federal summer youth training programs. Over all, said a Labor spokesman, the youth jobs program added an estimated 75,000 to the total rise of 198,000 in nonfarm payrolls, the biggest gain in more than two years.

Excluding the youth hiring, nonfarm payrolls were up a more modest 123,000, with most of the gains in the health and service sectors.

Manufacturing employment held steady, following a large decline in June, and construction employment fell slightly despite recent declines in interest rates that typically help the housing industry.

Kevin Flanagan, an economist for Dean Witter Reynolds Inc., said many of the jobs that were added in July seemed to be low-paying and part-time positions. Moreover, he said, average hourly earnings and weekly hours were both unchanged, suggesting personal income remained weak.

Analysts also said they do not expect to see much of a gain in industrial production, which is due to be reported on Friday.

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