WASHINGTON -- Reflecting an increasingly grim labor market, the government reported yesterday that the nation's unemployment rate climbed three-tenths of a point in March, to 6.8 percent, the highest rate since late 1986.
With the ranks of the jobless swelling by another 414,000, there are 2.1 million more people looking for work now than there were last June. The total number of unemployed is nearly 8.6 million.
In Maryland, the unemployment rate rose to 6.5 percent in February from 6.1 percent the month before, state officials reported last week. The Maryland figures are not adjusted for seasonal variations, whereas the national figures are.
A loss of employment in construction industries was the biggest contributor to the jump in state unemployment, according to the Department of Economic and Employment Development. The jobless rate in the Baltimore area increased to 7.0 percent in February, from 6.4 percent in January. Baltimore's jobless rate climbed to 9.4 percent from 9.1 percent, according to DEED.
The national figures released yesterday, which provided the first broad view of the economy in March, were somewhat worse than expected and increased the pressure on the Federal Reserve for another round of interest-rate cuts to help pull the nation out of recession.
The report was almost unrelievedly negative. Besides fewer jobs and higher unemployment, it showed more discouraged and involuntarily part-time workers, longer spells without work and a shorter work week.
Nonetheless, economists were divided as to whether expectations of a prompt economic recovery had been significantly set back.
Stock prices sagged yesterday after the Federal Reserve did not act on the news to reduce interest rates. The Dow Jones industrial average closed at 2,896.78, down 27.72 for the day. Prices of Treasury securities swung wildly and settled somewhat higher.
Except for the length of the average work week, which declined moderately last month, employment statistics are not considered predictors of business conditions.
In fact, those factors that do not move in tandem with the economy tend to lag behind it, so that the unemployment rate, for example, may well continue to increase even after the economy has begun to expand again.
But while unemployment has often tended to keep rising after the economy starts to expand again -- people may resume looking for jobs before companies are confident enough in the recovery to hire them -- the jobless rate sometimes falls promptly.
"We've had both kinds of experience," said Janet L. Norwood, commissioner of labor statistics.
This time, in fact, prospects for a quick improvement in the jobless rate could be relatively good because growth of the labor force has slowed substantially, largely for demographic reasons.
Over the last year the labor force has expanded by 650,000, barely one-third of the average growth rate of 1.8 million during the last decade.
At the same time, however, this lack of labor force growth has helped keep the jobless rate from rising as high as it otherwise would have.
The jobless rate now is 4 percentage points below the 10.8 percent peak reached during the 1981-82 recession, the worst since the 1930s.
At the White House, Michael J. Boskin, the president's chief economic adviser, stuck to his recovery forecast yesterday even as it became increasingly likely that the economy's contraction in the first quarter of the year was greater than the 1.6 percent rate of contraction in the final quarter of 1990.
"We're going to see mixed signals for the next few months," Mr. Boskin said in an interview. But, he added, "The economy is likely to rebound by the middle of the year if the Fed makes sure to sustain growth in money and credit."
He cited currently favorable preconditions for recovery: relatively low oil prices, an expanding money supply, falling interest rates, lean inventories and resurgent consumer confidence.
But Geoffrey H. Moore, director of Columbia University's Center for International Business Cycle Research, concluded that the recovery would probably be postponed.
"The recession is still with us -- and looks like it will be for several more months," he stated in publishing the index that the Columbia center designed to forecast the labor market.
The index fell in March to a nine-year low.