WASHINGTON - Federal Reserve officials are likely to keep monetary policy steady following the Labor Department's report Friday that labor markets remained generally flat in October, analysts said.

Their comments came after the department's household survey showed the civilian unemployment rate slipped from 7.5% to 7.4%, the lowest level since April. The improvement came on continued shrinkage in the labor force, suggesting fewer people were looking for work.

A separate survey of nonfarm payrolls showed a small gain of 27,000 jobs, which was in line with bond market expectations. Excluding job losses from the expiration of the federal government's summer hiring program, nonfarm payrolls would have gone up 49,000, Labor officials said.

"I think the Fed will leave policy unchanged," said James Fralick, senior economist for Morgan Stanley & Co. "The economy needs to show unmistakable signs of rolling over. and falling back into recession, and these numbers are really consistent with very slow growth."

In all likelihood, said Fralick, Fed officials will be patient and wait to see if the economy improves from their many cuts in short-term rates earlier this year. Moreover, the market is waiting to see what kind of budget President-elect Bill Clinton will propose to stimulate the economy once he gets in office.

"They've been taking a hands-off attitude," said John Mueller, chief economist for Lehrman Bell Mueller Cannon Inc., a financial advisory firm in Arlington, Va. "This isn't enough to shake them."

Mueller said he expects the last round of rate cuts by the Fed to start producing an acceleration in the economy by the end of the year. He forecasts growth in the range of 2% to 2.5% in the fourth quarter, and about 4% in the first half of next year.

Many other analysts are less optimistic, expecting growth of around 1% to 1.5% in the fourth quarter, compared to the estimated 2.7% pace between July and September. Still. they said, there are enough hints of improvement that the Fed will refrain from more rate cuts.

The Labor Department reported last Thursday that initial jobless claims fell to 360,000, the lowest level in two years. Analysts also said there are scattered signs of a pickup in retail sales and in the money supply, which Fed officials watch closely.

The mixed nature of the outlook was reflected in the employment report, which showed continuing job losses in manufacturing and scattered gains in other sectors. The gain of 27,000 in nonfarm payrolls in October followed decreases of 72,000 in September and 109,000 in August.

Manufacturing employment shriveled by 56,000, bringing total job losses in that sector to 225,000 in the last five months. Labor officials said the losses were widespread, reflecting cutbacks in defense and other industries.

But the average workweek for manufacturing climbed to 41.1 hours from 40.9 hours, and factory overtime increased. That should mean a small increase in industrial production when it is reported Nov. 16, analysts said. In addition, the index of total private hours worked jumped 0.6%.

Most of the gains in nonfarm payrolls came on an increase of 89,000 service sector jobs, which officials said was well above the growth rate recorded during the first nine months of the year. Employment in finance, insurance, and real estate grew slightly, and there was a small gain in wholesale trade, the first increase in over two years.

Separately, the Federal Reserve reported that outstanding consumer credit increased 2.7% in September, breaking seven straight months of decline. The report seems to suggest consumers may be willing to spend more after paying down their debts most of the year.

However, not all analysts saw signs of improvement, emphasizing that the employment figures were in line with a long string of monthly reports showing little strength in the labor markets.

"Despite one or two signs of slightly better economic growth, it's not happening, really," said Lawrence Chimerine, senior adviser to DRI/McGraw-Hill Inc. "The economy is still in a very slow growth mode, close to stagnation."

"The key question is, what's going to lift jobs up, and I don't know the answer to that," he added.

But Chimerine said the Fed probably will not cut interest rates again any time soon, in part because officials want to retain the ability to act in the future if the economy deteriorates. "The Fed won't do anything in a weak bond market, and if they respond to every weak number, they're going to have negative interest rates soon," he added.

Since the Fed's last cut in the federal funds rate, to 3% from 3.25% on Sept. 4, short-term and long-term rates have increased. The market was off again sharply on Friday as the yield on the 30-year Treasury bond climbed over 7.70% amid worries over this week's $37.0 billion quarterly refunding.

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