The potential for the U.S. economy to avoid recession grew more remote Friday morning as the Labor Department reported a loss of 80,000 non-farm jobs in March and a rise to 5.1% in the unemployment rate.

Together with comments on Wednesday from Federal Reserve Chairman Ben Bernanke that the economy may contract during the first half of 2008, the jobs data indicate that the economy could have slipped into decline in the first quarter after posting anemic 0.6% growth during the last quarter of 2007.

During the first quarter, payroll employment fell by 232,000. In March, employment continued to fall in construction, manufacturing, and employment services, while health care, food services, and mining added jobs.Construction lost 51,000 jobs in March and now has fallen by 394,000 since its peak in September 2006. Most of the March decrease in employment occurred among specialty trade contractors (-42,000), with both residential and nonresidential contractors contributing to the decline, the Labor Department said.

Average hourly earnings rose by 5 cents, or 0.3 percent, over the month.

The number of unemployed persons increased by 434,000 to 7.8 million in March. Since March 2007, the number of unemployed persons has increased by1.1 million.

The number of people who are unemployed due to job loss increased by 300,000 to 4.2 million in March. During the past 12 months, the number of unemployed job losers has increased by 914,000.