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Last Updated: Friday, 2 May, 2003, 21:47 GMT 22:47 UK
Big jump in US jobless

The US unemployment rate hit 6% in April as businesses cut jobs for the third month in a row.

Official figures showed that the jobless rate rose from March's figure of 5.8% to hit the highest level so far this year.

The past three months has seen payroll figures cut by 525,000, with 8.8 million workers now unemployed.

"There's no denying that these are an awful set of job figures for April," said Ken Mayland of ClearView Economics in Cleveland.

But there are hopes the labour market will begin to improve now the war in Iraq is over.

"It would be my best judgment that we've now seen the worst," Mr Mayland said.

'Lagging indicator'

The Dow Jones Industrial Average initially dipped on news of the jobless figures, before rebounding strongly.

People thought business would pick up instantly when the war situation was clarified
Carol Stone, Nomura Securities

Traders chose to overlook the jobless data, focusing instead on separate data that showed orders for US manufactured goods rose by 2.2% in March, their best showing since July 2002.

Some economists think the jobless rate could continue to climb throughout the summer as improvements in the economy take time to trickle down into hiring.

White House spokesman Ari Fleischer, travelling with President George W Bush in California, said: "Unemployment is a lagging indicator, and Congress must not lag in its responsibility to pass his job and growth package."

But some analysyts said they believed the growing jobless total is a cause for concern.

Joel Naroff, a US economist at Naroff Economic Advisors, said: "It's awfully tough to create any jobs in the economy when manufacturing loses 95,000 jobs.

"That is still the major problem as far as the economy goes."

'Weak figures'

Carol Stone, a US economist at Nomura Securities in New York, said the jobless figures were "weak".

"People thought business would pick up instantly when the war situation was clarified."

Overall, businesses cut 48,000 jobs in the month, the US Labour Department said.

The manufacturing sector was hardest hit with 95,000 jobs lost, while retailers trimmed staff by 10,000.

But government jobs swelled by 32,000, and jobs in the construction industry also expanded by 18,000.

John Shin, Lehman Brothers economist
"We've seen businesses so reluctant to invest in more plant and equipment...."

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