- The Washington Times - Saturday, April 6, 2002

The nation's unemployment rate nudged up to 5.7 percent in March, but employers added 58,000 positions to payrolls, signaling a strengthening economy that hasn't completely filtered down to the job market.
The Labor Department said 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. U.S. businesses also added 58,000 new jobs last month, marking the first gain in seven months, after a revised loss of 2,000 payroll jobs in February.
Businesses slashed thousands of jobs to cope with the recession, and company profits were hit hard. So economists say companies will be reluctant to hire back laid-off workers until profits recover and executives are convinced that the recovery is here to stay.
As it did during the last recession, which ended in 1991, the nation's unemployment rate could still rise in the 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 rates to the lowest levels in four decades, making borrowing attractive for many businesses and consumers.
Some economists say the Fed might begin to raise short-term interest rates 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 September 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 averaged 111,000 a month from January 2001 to January 2002.
Construction employment fell by 37,000 in March, after 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.
@$:In a separate report yesterday, the Fed reported that Americans borrowed briskly in February, especially to finance cars, vacations and other big-ticket items.
Consumer credit rose by a seasonally adjusted $7.1 billion, or at a 5.1 percent annual rate, the report said. The advance in line with expectations offered another encouraging sign consumers will continue to spend and help along the current economic recovery.

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