PORTLAND - An increase in the Oregon unemployment rate to 7.6 percent in March signals some stubborn weakness in a state economy that has suffered the highest jobless rate in the nation for nearly two years, officials said Friday.

The Oregon jobless rate for March, up from 7.3 percent in February, was nearly two full points above the national level of 5.8 percent as manufacturing continued to decline, according to Oregon Employment Department figures.

"This is a terrible report," said John Mitchell, the regional economist for U.S. Bancorp.

Manufacturing employment is down 30,600 jobs in the past three years with a loss of 2,400 jobs in March. Transportation equipment and food manufacturing each have cut 800 jobs since February.

Over the past year, primary metals manufacturing lost 800 jobs while computers and electronics lost 2,800 jobs.

In March, manufacturing employment stood at 191,200 jobs, its lowest level in more than nine years.

When asked whether there was any good news about manufacturing in Oregon, state labor economist Art Ayre responded: "None that leaps to mind, no."

The total seasonally adjusted payroll employment in Oregon dropped by 4,900 jobs in March to reach 1.567 million jobs, its lowest level since June 1999. Employment peaked at 1.619 million jobs in November 2000.

Ayre said the Oregon economy seemed to be staging a modest rebound during the first eight months of 2002 as employment rose by 13,500 jobs. But the rebound was not sustained in the most recent seven months as employment in March slipped 800 jobs below the previous low in December 2001.

The actual number of unemployed Oregonians reached 154,074 in March, or roughly 50 percent higher than the average of about 100,000 jobless workers in any given month during the boom times of 1996 through 1999, Ayre said.

In addition to manufacturing, government has shown weak employment trends in the past year, down 3,200 jobs since March 2002.

Both wholesale and retail trade have seen almost no net employment change in the past 12 months. Transportation and utilities also were nearly unchanged.

But Mitchell noted the Oregon jobless rate has been higher than the national rate since February 1996, yet the state frequently outperformed the nation in economic growth in the 1990s.

He also noted that manufacturing began to slide nationally in April 1998, well before the "dot-com" bubble burst on Wall Street and the economy began its downturn.

"We've got be very careful to leap from the experience of the last couple of years and sort of stretch that out forever," Mitchell said. "The population continues to grow, and we will be growing again economically, but not at rates we saw in the early 90s."

There were some signs of recovery as health care, private educational services and restaurants fared better.

In March, private educational services employed 27,300, its highest level ever after consistent growth of more than 10,000 jobs in the past decade.

Food services, which includes restaurants and bars, increased by 1,900 jobs from March 2002 while health care improved by 2,500 jobs during those 12 months.

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