Jobless Rate 7.3% but 8.7% in State : Economy: While unemployment rose, the number of people in the nation with jobs grew. The growth in the labor force is seen as a sign recovery may be underway.

WASHINGTON —  Unemployment jumped to a six-year-high of 7.3% nationally and a nine-year record of 8.7% in California last month, the Labor Department said Friday.

But thousands of previously discouraged job seekers apparently began looking again for work, an encouraging sign that the recovery may be underway.

Nationally, 164,000 more people had jobs last month than in January and employment grew by 22,000 in California. However, the unemployment rate climbed because even more people were seeking jobs.

The unemployment figure actually carries with it a hint of good news, some analysts said. The number of people actively seeking work grows rapidly at the low point of a recession, when the first modest signs of a recovery begin to appear. “We may have bottomed out,” said Gordon Richards, economist for the National Assn. of Manufacturers.

The recession, underway since July, 1990, has taken a heavy toll on virtually every state and every industry.

The February jobless rate for the United States marked the highest level since July, 1985, when 7.4% of the labor force was unemployed.

The increase in the California figure, to 8.7% from 8.1%, puts the state’s rate at the highest level since September, 1983. The state has been suffering from declines in defense spending, a weak construction industry and bad weather. The economic weakness in California was described as “fairly widespread” by Thomas Plewes, associate commissioner of the Bureau of Labor Statistics.

However, the labor force has been growing steadily, both nationally and in California. “More people think there are jobs out there. That’s why you had the jump in the unemployment rate,” said John O. Wilson, chief economist at Bank of America.

The state “has to generate a sizable number of new jobs to accommodate the growth of the labor force,” said Lynn Reaser, chief economist for First Interstate Bank. “California continues to be weak in terms of job performance,” she said.

Because the recession has been lengthy and businesses and consumers still carry a heavy debt load, the return to a robust business climate is likely to be gradual. In Southern California, “especially in Los Angeles, we really were hammered,” said Jack Kyser, chief economist at the Economic Development Corp. of Los Angeles County. “It’s going to be an agonizingly slow recovery.”

Orange County’s jobless rate for January will be released Monday. In December, the county’s unemployment rate was 4.4%, unchanged from the previous month, with 61,000 Orange County residents out of work.

While the home building and retailing industries are improving, layoffs in the aerospace industry and cutbacks at banks and savings and loan associations are slowing the pace of the recovery, he said.

“The sense is that people have cut back their employment levels so much that they’re down to the bone and are going to have to step up their level of service with new hires,” Kyser said. “But they’re cautious new hires.”

Average weekly hours worked rose last month and overtime also increased, both encouraging signs of a business revival. In economic circumstances such as the nation is experiencing now, companies tend to be hesitant, first increasing overtime for their current employees, and then moving into the cautious expansion described by Kyser.

Although the Federal Reserve Board and the Bush Administration “hope for a strong snapback in the second quarter, much of the private sector thinks the recovery may slip into the third quarter,” Bank of America’s Wilson said.

Both Republicans and Democrats attempted to turn Friday’s report to partisan political advantage.

In Oklahoma City, where President Bush was campaigning, spokeswoman Torie Clarke said that the February report “makes things tough for the unemployed.” The Democratic-controlled Congress “should get off its duff” and approve the President’s economic and tax package, she said.

In Washington, Democratic leaders insisted that their political prescriptions would heal the economy.

“Last month, we passed an extension of benefits for the long-term unemployed; last week, we passed a tax cut for all middle-income Americans and just last night we passed a budget which will create tens of thousands of new jobs which will rebuild America,” said House Majority Leader Richard A. Gephardt (D-Mo.).

The President signed the bill extending unemployment benefits another 13 weeks but has said that he will reject the Democrats’ tax and budget plans.

The number of unemployed workers rose in February by 315,000 to 9.2 million. In California, the count increased by 101,000, climbing to 1.3 million.

AFL-CIO President Lane Kirkland called for a major federal jobs program, saying: “In the absence of leadership from the White House, Congress should get moving to put Americans to work rebuilding the nation’s sagging infrastructure.”

Jobless rates, which rose last month for all major population groups: adult men, 7%, from 6.9%; adult women, 6.1% from 5.9%; whites, 6.5% from 6.2%; blacks, 13.8% from 13.7%; Latinos, 11.6% from 11.3%; and teen-agers, 20% from 18.3%.

The “comprehensive” unemployment rate, a broad measure that includes discouraged workers and part-timers who want more work, was 10.9% last month. In addition to the 9.2 million jobless, there were 6.5 million Americans working part time who want full-time jobs, and 1.1 million workers who have dropped out of the labor force and given up looking for work.

Times staff writer Cristine Gonzalez in Los Angeles contributed to this story.

Signs of Hope for Jobless...

These fields showed the biggest increase in jobs last month. General Merchandise Stores: 54,000 new jobs Health Services: 31,000 Motor Vehicle and Equipment: 30,000 Eating and Drinking Places: 27,000 Business Service: 25,000 Transportation Service: 14,000 Some of these gains are offset by declines in other fields. But the discrepancy between a higher jobless rate and additional new jobs is linked largely to differences in how the two employment surveys are taken.