WASHINGTON (AP) _ The nation's unemployment rate shot up to 6 percent in April _ the highest point in nearly eight years _ as the lingering effects of last year's recession continued to batter workers.
The rise in the jobless rate occurred even though U.S. companies added jobs for the first time in nine months, the Labor Department reported Friday.
Payrolls grew by 43,000 during the month, a welcome sign after companies had slashed hundreds of thousands of positions to cope with last year's recession and the jolt of the Sept. 11 terror attacks.
Still, job growth wasn't strong enough in April to take care of the 565,000 people who entered the work force during the month. That caused the unemployment rate to rise from March's 5.7 percent rate.
The growth in payrolls comes after the government said that companies actually cut 21,000 jobs in March, a big revision from the 58,000 job gain previously reported.
Stock prices were plunging Friday. In the first hour of trading, the Dow Jones industrial average was down 91 points and the Nasdaq index had lost 24 points.
Presidential spokesman Ari Fleischer said the new report highlighted the critical need for the stimulus package just passed by Congress.
``The president worries about a jobless recovery,'' Fleischer said, using the term that was used to define the early part of the last recovery, when the unemployment rate continued to rise even though the recession ended in March 1991.
Criticism of the ``jobless recovery'' was used to good effect by Bill Clinton in his successful campaign to defeat Bush's father in 1992.
April's jobless rate was the highest since August 1994, when unemployment also was at 6 percent.
Economists said Friday's report indicated the economic recovery is still on track though progressing at a moderate rather than sizzling pace.
``The recovery is persisting,'' said Ken Mayland, president of ClearView Economics. ``However, companies, in general, are not going to get aggressive about rehiring until the economy puts in a track record of improved prospects.''
Mayland said he wasn't worried that the economy might backslide into a downturn _ a ``double-dip'' recession.
President Bush has credited his $1.35 trillion tax cut enacted last year for helping pull the economy out of recession. Bush wants to make sure the recovery remains on firm footing.
Job growth in services, normally an engine of job creation in the United States, rose by 87,000, recouping job losses that totaled 245,000 in October and November.
After more than a year of sustained job cuts, temporary help firms added 66,000 positions in April, the third straight month of job gains.
Economists say that's a particularly encouraging sign for job growth in general in the months ahead. Companies often hire temporary workers before they hire new full-time workers or rehire laid-off workers, they say.
Employment in the insurance industry rose by 9,000, after suffering six months of job losses.
Those and other job gains were tempered by losses elsewhere.
The construction industry shed 79,000 jobs. Factories _ hardest hit by the recession _ cut employment by 19,000 in April. But job losses in the battered industry show signs of moderating. The industry's job losses averaged 37,000 a month from February to April, compared with average monthly losses of 119,000 from March 2001 to January.
Employment held steady in electronic equipment manufacturing, and rose slightly in industrial machinery, following more than a year of heavy job losses in both industries. But employment continued to drop at motor vehicle plants and aircraft factories.
Even as the economy recovers, the nation's unemployment rate is expected to rise in coming months.
Some economists predict the jobless rate will peak at from just over 6 percent to around 6.5 percent by June, reflecting their belief that companies will be reluctant to quickly hire back laid-off workers until profits recover and executives are convinced the recovery is here to stay.
Even so, a report Thursday indicated the pace of layoffs is easing. The number of workers filing first-time claims for unemployment benefits dropped by 10,000 last week to 418,000, lowest since March 23, the Labor Department said.
The economy sprinted out of recession with a 5.8 percent growth rate in the first quarter of this year. But analysts estimate the recovery has slowed in the current quarter and they project economic growth at 3 percent to 3.5 percent rate.
Given the budding recovery, many economists expect the Federal Reserve to leave short-term interest rates _ now at 40-year lows _ unchanged when it meets May 7. The Fed cut rates 11 times last year to rescue the economy from recession, which began in March 2001.