U.S. Job Total in March Falls by 108,000

The nation lost 108,000 net jobs in March, almost three times the number that had been expected, the Labor Department said Friday.

The department also reported that February’s job losses were greater than previously announced, totaling 357,000. The unemployment rate held steady at 5.8% in March, near the eight-year high of 6% reached in December.

Coming in the midst of other signs of weakness and while American consumers and executives are transfixed by war, the new jobs numbers suggested an economy that started the year on the mend but has ground perilously close to a halt.

“We’d better hope it’s Iraq that’s causing these losses, because if it’s not we could be in for a rough ride,” said Joel L. Naroff, a Pennsylvania economic consultant.

The March job losses were particularly worrisome because they were so widespread.

Among the biggest job losers: temporary-help agencies, whose hiring usually signals the start of recovery. The agencies cut payrolls by 48,000 last month.

Also cutting were government agencies, whose employment totals had been rising until recently. Government employment fell by 40,000 in March as cash-strapped school districts and others laid off workers to cope with budget shortfalls.

The latest losses brought to 2.1 million the net number of jobs that have vanished since the March 2001 start of a recession that has yet to be officially declared over. They signaled little relief in sight for the nation’s 8.4 million unemployed, including the almost 1.8 million who have gone six months or more without a paycheck.

But for all this, the numbers did not settle the fundamental disagreement between those who believe the nation is suffering from war jitters and little else and those convinced that the country still is wrestling with the aftereffects of the stock and tech bubbles.

The “jitters” camp contends that recent signs of economic weakness are largely attributable to special circumstances such as bad weather discouraging shoppers and the call-up of military reservists, whose departure from civilian life is counted as a job loss. They predict that once the U.S. completes its invasion of Iraq, the American economy will bounce back.

“There can’t be any question the pace of job declines, which has picked up considerably, is the result of heightened geopolitical risk,” said former Federal Reserve Gov. Laurence H. Meyer. “The economy didn’t fall out of bed because post-bubble hangover got more intense.”

But the post-bubble camp is just as adamant that recent job losses, production cuts and sales slowdowns are evidence of an economy still haunted by its past. They scoff at suggestions that the setbacks could be put down to transitory factors such as bad weather.

“Bad weather?” said Jeffrey Wenger, an economist with the generally liberal Economic Policy Institute in Washington. “The bad weather hit the Northeast corridor. This is a big country. The job losses were everywhere.”

Investors appeared to pay almost no attention to the new employment report, focusing instead on the war or corporate profit warnings.

Analysts were hard pressed to explain why the unemployment rate remained at 5.8% in the face of the additional loss of jobs in March.

The jobless rate is based on a survey of about 60,000 households. The job and job-loss figures come from a separate -- and much larger -- survey of companies. The two usually produce similar results. But they have diverged wildly in the last year, with the household survey suggesting the economy is adding jobs and the company survey showing it losing them.

The call-up of reservists may explain part of the disparity. As employees have reported to active duty for the war with Iraq, they have fallen off corporate job rolls but have continued to tell Labor Department survey takers they are employed.

The problem is that because most of the call-up occurred in February and before, it does little to explain the continued loss of jobs in March.

The Pentagon said about 210,000 reservists had been called to active duty by mid-March, but the Labor Department said it could not quantify the effect of the call-up on its employment figures.

Construction was one of the few industries to post job gains during the month, adding 21,000 in March after shedding 42,000 in February.

The manufacturing sector recorded its 32nd straight month of contraction, reducing payrolls by 36,000. Since its employment peak in April 1998, the sector has lost 2.5 million jobs.

Transportation employment was down by 14,000 in March. The sector has lost more than 300,000 jobs since its employment peak in January 2001. More than half of the losses came from the airline industry.

There were two notes of hope for workers in March’s otherwise dreary report. The average workweek for production and nonsupervisory employees, who account for about 80% of the U.S. labor force, rose two-tenths of an hour to 34.3 hours. And average hourly earnings were up 2 cents to $15.10. In the last year, they have increased 3.1%.