Nation’s Jobless Rate Is Stuck at 7% : Unemployment: The figure for California drops to 9.4% in March. Firms’ reluctance to hire new workers could bolster Clinton’s push for economic stimulus plan.

WASHINGTON —  In a disappointing report that could bolster President Clinton’s push for an economic stimulus package, the government said Friday that the nation’s sluggish job market kept the U.S. unemployment rate stuck at 7% in March.

California’s unemployment rate fell to 9.4% in March from 9.8% in February, but the decline appears to have stemmed largely from more discouraged job hunters giving up the search for work or leaving the state.

In Orange County, the unemployment rate crept up to 6.5% in February from 6.4% the previous month, the most recent figures available. That figure, however, was better than a nine-year high in the county, 7.1%, recorded for November.

In Los Angeles County, the news was somewhat more upbeat. The area’s jobless rate--which, based on a small sampling, often takes wide swings--declined to 10.4% from a recession-high of 11.2% in February.

Across the country, however, employers remained reluctant to hire new workers. While firms typically are slow to hire following a recession, the pickup in employment has been particularly weak in this recovery.

The closely watched survey of U.S. employer payrolls showed a decline of 22,000 jobs in March, following a robust gain of 367,000 in February, according to the Labor Department. All told, economists said it added up to moderate job growth in the first quarter of the year.

“Firms are continuing to do more with fewer people,” said Barry Rogstad, president of the American Business Conference, a diversified group of rapidly growing companies.

“This is a slow recovery, not dynamic,” added Martin Lefkowitz, an economist with the U.S. Chamber of Commerce. The economic expansion “is certainly continuing, but it’s slow, and this is going to have some policy implications,” he said.

In fact, Labor Secretary Robert B. Reich put out a statement Friday saying that the unemployment report “reinforces the need” for the Administration’s $16.3-billion economic stimulus plan, which is encountering stiff resistance from Senate Republicans.

He cited the recent decline in consumer confidence and “continuing mass layoffs” as reasons why Congress should quickly pass the initiative.

Appearing before a congressional hearing, William G. Barron Jr., deputy commissioner of labor statistics, noted that there have been “slow but steady declines in unemployment” between June, when the rate peaked at 7.7%, and February, when it initially hit 7%.

Still, Barron noted that joblessness remains well above pre-recession levels that fluctuated between 5% and 5.4%.

The generally downbeat statistics contributed to a gloomy day on Wall Street, where the Dow Jones industrial average fell 68.63 points, to 3,370.81.

Lately, the basic trend in the U.S. economy has been an upsurge in the output of goods and services, without an accompanying boom in new jobs. Many companies have relied on overtime to avoid hiring new employees. Even though overtime hours declined in March, they stayed at a high level.

Other employers have filled in their ranks with temporary workers, who often receive no health insurance or other benefits. The temporary help industry has accounted for a quarter of the employment gains since January.

The number of discouraged workers--Americans who have given up seeking jobs and are no longer counted among the officially unemployed--remained at 1.1 million in the first three months of the year, “the same level that has prevailed since the third quarter of 1991,” Barron said.

About 6.2 million Americans worked part time last month because they could not find full-time jobs. Administration policy-makers are concerned because this group has ranged between 6 million and 6.5 million for more than 18 months, indicating the economy’s inability to generate jobs at a rapid clip.

Before the 1990 recession began, there were 4.8 million people working part time because of the inability to find full-time work.

The government’s payroll survey showed that the greatest job losses were in construction, which showed a decline of 59,000, at least partly due to bad weather. Service industries, including health care, posted the only increases nationwide.

According to the government’s separate survey of households, 118.6 million Americans were working last month, up 114,000 from February. The jobless total was 8.9 million, a decline of 12,000. Most economists, however, place more weight on the broader-based payroll survey.

In California, the government’s households survey showed that employment fell by 5,000, to 13.89 million, while the number of jobless people shrank by 59,000, to 1.45 million. The statistics from the usually more authoritative payroll survey were incomplete because of an ongoing revision of the way the California figures are compiled.

But the available payroll figures--which unlike the federal statistics were not adjusted for seasonal trends--showed a gain of 72,200 jobs in March. While all of the industry categories showed increases, economists said nearly all of the rise stemmed from seasonal factors. For instance, businesses such as construction and retailing typically add workers during this time of year.

“It’s not a recovery, by any stretch of the imagination,” said Joseph A. Wahed, chief economist for Wells Fargo Bank in San Francisco. The California economy, he said, “is stabilizing at a fairly low level.”

The 9.4% jobless rate was the state’s lowest since last July, but it remains well above the 8.5% rate of March, 1992. In addition, payroll jobs are down 1.3% from a year ago.

California’s jobless rate was also the highest reported among the 11 major industrial states whose unemployment figures were released Friday. Illinois’ joblessness was next highest, at 8.4%, while North Carolina posted the lowest rate, 5.3%.

In Los Angeles County, the decline in joblessness to 10.4% followed three monthly increases in a row. The volatile county figures showed employment growing by 40,000 to 4.07 million, while the number of unemployed people fell 39,000 to 471,000.

But Jay D. Horowitz, labor market analyst with the California Employment Development Department, warned against reading too much into those figures.

“We want to see at least three or four months of drops before we can say a trend is forming,” Horowitz said. And until employers get more confident about business prospects, Horowitz said, he does not foresee “any big positive gains being made.”

Silverstein reported from Los Angeles and Rosenblatt from Washington.

California Employment Totals

Here is a breakdown of state employment, along with how those levels have changed since March, 1992. All figures are derived from the national monthly poll of 350,000 U.S. establishments employing a total of more than 41 million people. Figures are not adjusted for seasonal trends.

March ’93 employment Change from March ’92 Total non-farm jobs 12,014,600 -159,200 Mining 32,500 -2,900 Construction 440,500 -27,600 Manufacturing 1,819,900 -89,800 Transportation/Utilities 598,600 -6,200 Wholesale trade 711,100 -9,500 Retail trade 2,073,800 -19,800 Finance* 782,600 -11,700 Services** 3,453,100 +36,800 Government 2,102,500 -28,400 Agriculture 287,900 +17,100

*Category includes financial services, insurance and real estate.

**Category includes, among others, business, health and educational services, along with hotel, motion pictures and recreation industries.

Source: California Employment Development Department