Tax-exempt activity was on hold yesterday as the market waited for today's employment data to determine the next price move.

The market dipped slightly at the open after jobless claims fell 47,000 to 405,000 in the week of Oct. 19, but traders quickly shrugged off the data. Prices moved back to unchanged and remained there for the duration of the session.

The market priced in a Fed ease earlier this week, and most traders were convinced that the jobs data will make more room for price gains.

"The question now is should we be thinking of further significant declines in bond yields and the data will determine that," said James L. Kochan, head of fixed-income research at Robert W. Baird & Co. "If the data is sufficiently weak it will send a powerful signal that the Fed will ease more. If it's ambiguous we will have to give up some ground. And if it's a really bad number -- and dealers are holding a lot of paper -- you could see it back up quite a bit."

Some market observers urged caution, however, noting that the data are difficult to predict.

"Everybody is geared up for this number to be weak and, quite frequently, when you have a wide consensus it goes unfulfilled," said William Sullivan, a money market economist at Dean Witter Reynolds. "Employment is one of the most difficult figures to predict in advance, and there is always the risk of a wide margin for error."

If the data come in as expected, traders say there is room for price gains, but the market faces resistance at the highs reached prior to the price drops that began a week ago.

"It's hard to doubt this market, but what's on everybody's mind is whether we can break through the old high," a trader said. "If we fail to penetrate the 7.80% level, we may have to give up the ghost a little."

Other market participants said prices are likely to stay in a narrow range, with limited upside and downside potential as the market digests a full plate of supply.

"There doesn't seem to be a lot of dramatic room for a move," a trader acknowledged. "Municipals have been trading in a narrow range all along."

In follow through business, Bank of America, senior manager for $441 million California general obligation bonds and alternative minimum tax housing bonds, reported an unsold balance of $31.6 million late in the session.

Market sources said there are bonds available in every maturity and expected to see a fair amount on the Street.

First Boston Corp., senior manager for the $272 million Georgia general obligation issue, reported an unsold balance of $52.3 million.

Goldman, Sachs & Co., senior manager for $158 million of Missouri third state building general obligation refunding bonds, reported an unsold balance of $12 million late in the session.

Goldman Sachs, also senior manager for $100 million of Los Angeles Department of Water and Power water works revenue bonds, reported an unsold balance of $1.19 million.

In secondary-market trading, activity was light as bids-wanted tapered off after several heavy sessions.

In dollar bond trading, most names were unchanged to up 1/8 to 1/4 point.

North Carolina Eastern 6 1/2s of 2017 were quoted at 96 1/2-3/4 to yield 6.76%. Denver Airport 7 3/4s, due 2021, were quoted at 93 7/8-94 1/4 to yield about 8.27%. New York City Water Authority 7s of 2015 were quoted at 99 1/8-3/8 to yield 7.05%, while Washington Public Power Supply System 6 7/8s of 2017 were quoted at 99 1/2-5/8 to yield 6.90%. Massachusetts Water Resources Authority 6 1/2s of 2019 were quoted at 94 7/8-95 to yield 6.90%.

In the short-term market, yields were unchanged to as much as five basis points lower on some names.

In late secondary-market trading, Los Angeles Trans were quoted at 4.06% bid, 4.03% offered. Texas Trans were quoted at 4.05% bid, 4.00% offered and Pennsylvania Trans were quoted at 4.20% bid, 4.15% offered. March New York State Trans were quoted at 4.95% bid, 4.90% offered, whil New York City Rans were also quoted at 4.95% bid, 4.90% offered.

In follow-through business, Philadelphia officials reported $43 million of deficit notes sold out of a planned $150 million marked a week ago.

The note proceeds should be enough to provide some financial relief to the cast-strapped city, a Philadelphia official said.

The city originally authorized the sale of $90 million of taxable notes, but added $60 million of tax-exempt notes when corporate investors expressed an interest in buying tax-exempt securities, according to Douglas Smith, the city treasurer.

About $33 million of taxable notes, priced at par to yield 8.50%, and roughly $10 million of the tax-exempt notes, priced at par to yield 7.50%, found their way into investors' hands, he said. Fourteen not-for-profit investors bought the taxable notes, with the University of Pennsylvania purchasing $10 million, he noted. One group of investors bought a portion of the tax-exempt notes, he said, but declined to name the investors.

Upcoming Issues

New York City plans to refund $950 million of outstanding insured general obligation bonds in three weeks, a city source said.

J.P. Morgan Securities Inc., which developed the refunding idea, is expected to be named book runner for the negotiated offering. The firm serves as a co-manager in the city's underwriting syndicate.

The refunding, included in the city's fiscal 1992 budget, is expected to reduce city debt service costs on future deals by freeing up capacity for bond insurance and letter of credit enhancements on future bond deals, which may include variable rate and zero coupon securities.

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