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US Unemployment Unchanged - 2003-04-05

The U.S. unemployment rate held steady in March at 5.8 percent, but there were significant job losses. The report reveals an economy that is growing slowly, if at all.

Diane Swonk, chief economist at Bank One in Chicago, says the employment report is short on clarity. It shows a loss of 108,000 jobs, far less than the 350,000 loss reported in February. And, explains Ms. Swonk, there are other positive elements in the report.

"Certainly, the continued call up of reservists [for the military] complicated the data," she said. "We don't know how much, to further suppress the payroll data. And yet, hours worked were up, wages were in pretty good shape and the unemployment rate was unchanged."

Analysts say more important in determining the economy's health is the outcome of the war in Iraq. If the war is short and oil prices come down, then that could offer a boost to business and consumer confidence and lead to a sharp upturn in economic growth. Ms. Swonk says, while the economy is hardly growing at all now, growth is likely to rebound to a 3.5 percent annual rate in the second half of the year.

"You know, it's nothing to get overly excited about, but it certainly is a lot better than what we've had," she emphasized. "And it is much better than what we had emerging from the Gulf War back in the early 1990s. You know, people are kind of looking for black-and-white, boom-and-bust. But it is neither."

Next week, the International Monetary Fund will issue its revised forecast for the U.S. and world economy. Also, next Friday, the finance ministers and central bank chiefs from the major economic powers will meet in Washington to discuss global economic concerns.