April 5, 2003	Saturday	Safar 2, 1424

WASHINGTON, April 4: US businesses, partially frozen by the buildup and launch of the Iraq invasion, axed 108,000 jobs last month, the government said on Friday.

The unemployment rate held steady at 5.8 percent.

“Bottom line: the economy is a casualty of the war,” said BMO Financial Group economist Sal Guatieri.

“We definitely need to see a conclusion to the conflict to see a revival of the US economy.”

The job losses in the non-farm sector were about twice as big as had been predicted.

The unemployment rate had been expected to edge higher. It held steady, however, as the total labor force shrank by 64,000 people, suggesting people dropped out of the job hunt.

“It is probably reflecting some job seekers losing confidence, perhaps waiting for the war to end and companies to resume hiring again before they seek employment,” Guatieri said.

Analysts said the news could have been worse after a grim February when companies had cut 357,000 jobs, even more than first estimated.

Many jobs also had been lost in March as the military called up reservists, delivering an unknown impact to the unemployment data.

Investors focussed on the advance of US-led troops to Baghdad’s airport, sending Wall Street’s Dow Jones industrials average of 30 top stocks up 42.56 points or 0.52 percent to 8,282.94 in early trade.

A breakdown of the March jobs figures showed:

— Manufacturers cut 36,000 jobs, bringing losses since a peak in April 1998 to 2.5 million.

— Transportation industries cut 14,000 jobs, bringing losses since January 2001 to 301,000 of which more than half were from airlines.

— Retailers shed 43,000 people, including 38,000 in bars and restaurants and 13,000 in department stores. The industry has lost 300,000 since a peak in July 2001.

— Government employment fell by 40,000 jobs.

— Services employment dropped by 10,000.

— In construction, employment rose 21,000.

“It is clearly disappointing, primarily driven obviously driven by war,” said Wachovia Corp. chief economist John Silvia said. Employers appeared to have halted hiring in the tourism sector.

Analysts pointed to some bright spots in the data.

The index of aggregate hours worked increased 0.3 percent in March to 147.6 hours. Analysts said this suggested employers saw the need to meet higher demand but were scared of hiring new people.’

The average workweek was extended by 12 minutes to 34.3 hours.

Average weekly earnings increased by 0.7 percent to 517.93 dollars.

“For us, there is a little bit of relief that the report was not worse,” said Steven Wieting, senior economist at Salomon Smith Barney.

“Employment is contracting. That is to be expected if the economy is growing at about 1.5 percent,” he said. “But lots of details in this report are not nearly as frightening in February.” —AFP