Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, April 6, 1991                   TAG: 9104060136
SECTION: BUSINESS                    PAGE: A-8   EDITION: STATE 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

UNEMPLOYMENT SURGES/ JOBLESS RATE MOVES TO 6.8 PERCENT IN MARCH

Friday's bleak government report - which showed the ranks of the jobless had swelled by 2 million since the middle of last year - lessened the likelihood of a speedy pullout from the recession, analysts said.

"What used to be an incredible job-creating machine, the U.S. economy, is now chewing up jobs left and right, eliminating them," said Allen Sinai, chief economist at the Boston Co.

"No one should kid themselves. This is an old-fashioned, tough recession," Sinai said. "A quick end is not in sight."

Last month's rise in the jobless rate, from 6.5 percent in February, was the fifth straight increase. The rate has now climbed 1.5 percentage point since last summer, when it was holding at a relatively low rate of 5.3 percent.

Washington policymakers have been hoping that the quick end to the Persian Gulf War would also cut short the recession by boosting consumer confidence. That forecast was buoyed last week with favorable government data showing pickups in consumer sentiment and the housing market.

But Friday's jobs report was so dismal that many analysts said a full-fledged recovery is not likely before fall. Other analysts still held out hope that the economy would start picking up by early summer.

Even if the economy is on its way back, analysts said, the job picture is likely to stay gloomy for several more months because businessmen are generally leery of rehiring workers until a recovery is well under way.

"We have a few signs of life, but we're not out of the woods by any stretch of the imagination," said Peter Radford, chief economist at the National Westminster Bancorp. in New York.

Recent major layoffs could further hamper a recovery, analysts said, because they translate into lost income, putting a stopper on consumer spending and making even people with solid jobs uneasy about making big purchases. Consumer spending is critical because it accounts for two-thirds of the nation's economic activity.

The bulk of last month's job losses came in manufacturing and construction, where there has been a steady erosion in recent months. But job declines hit the service-producing industries as well, especially retail stores.

The report prompted new calls for action by the Bush administration, which has maintained that the recession would be short and shallow.

"Last month, while working families were told that `prosperity is just around the corner,' more than 400,000 Americans became unemployed," said Lane Kirkland, president of the 14.2 million-member AFL-CIO.

"This is a serious recession and the administration and Congress ought to face up to that fact," Kirkland said.

The U.S. Chamber of Commerce, too, called the jobs report a sign that "the economy is far worse off than government policymakers have said."

Many analysts said the Federal Reserve, which has in the past lowered interest rates in the wake of dreary jobs numbers, should ease again.

However, they said it was unlikely that the Fed would soften its inflation-fighting campaign and nudge interest rates down again before reviewing the March inflation reports, due out next week.

Friday's jobs report showed that in March, payrolls fell by 206,000, marking the sixth straight month that U.S. businesses have cut jobs. It has been the worst stretch of layoffs since the 1981-82 recession, with 1.3 million jobs cut since last September.

The job loss number can differ from the number of newly unemployed because the two figures are derived from different surveys. In addition, the number of newly unemployed includes both people who were laid off in a given month and people who returned to the labor force but were unable to find jobs.

Total civilian employment was down slightly to 116.8 million, while the jobless numbered 8.6 million, a 410,000 increase over the 8.2 million unemployed Americans in February.

The number of discouraged workers - people who want a job but don't bother looking because they don't think they can find one - was 1 million in the first quarter of 1991, the government said. Though little changed from the final three months of 1990, it was a 210,000-increase over a year ago.