Unemployment rate rises to 5.7 percent in March

Posted 9:23AM on Friday 5th April 2002 ( 23 years ago )

WASHINGTON - The nation's unemployment rate nudged up to 5.7 percent in March, but employers added 58,000 new positions to payrolls, signaling a strengthening economy that hasn't completely filtered down to the jobs market. The Labor Department said Friday that the March rate was an increase of 0.2 percentage points from the previous month. Economists had been expecting a rise to at least 5.6 percent. The rate has been bouncing up and down slightly for the past six months. But employment gains in services and local government tempered job losses in construction and manufacturing, and overall, U.S. businesses added 58,000 new jobs last month. That's the first gain in seven months and it compared with a revised loss in February of 2,000 payroll jobs. Businesses slashed thousands of jobs to cope with the recession, and company profits were hit hard. So economists say companies will be reluctant to quickly hire back laid-off workers until profits recover and executives are convinced the recovery is here to stay. As it did during the last recession that ended in 1991, the nation's unemployment rate still could rise in coming months as businesses regain financial strength. Some economists think the rate will climb to more than 6 percent before a prolonged drop-off occurs. To revive the economy, the Federal Reserve slashed interest rates 11 times last year, pushing some interest rates down to the lowest levels seen in four decades, making borrowing attractive for many businesses and consumers. Some economists say the Fed may begin to raise short-term interest rate as early as May or June. But others aren't so sure. They wonder whether consumers who snapped up big-ticket goods throughout the slump will continue to spend briskly, a factor affecting the strength of the recovery. Consumer confidence soared in March to its highest level since Sept. 11. Job cuts continued at the nation's factories with a loss of 38,000, but it was at the slowest pace since late 2000. Losses have averaged 111,000 a month from January 2001 to January 2002. Construction employment fell by 37,000 in March, following an increase the month before. But employment in services increased by 118,000 last month -- the largest gain in a year and a half. Employment in that sector has nearly recovered from the combined loss of 245,000 jobs in October and November. Local government education added 27,000 jobs in March, about twice the monthly average in the last year.

http://accesswdun.com/article/2002/4/196425