Some 35,000 workers lost their jobs in the first three months of the year, boosting the unemployment rate of the civilian labor force to 7.6 percent, the highest in almost two years, the Central Bureau of Statistics reported Thursday. The seasonally adjusted jobless rate rose from a revised 6.5% in the fourth quarter of 2008 and from 6.1% in the year-earlier period, the bureau said. "This is not good news for the Israeli economy," Ron Eichel, an economist at Meitav Investment House, said Thursday. "This shows that the Bank of Israel will have to continue its expansionary monetary policy for a long time." "Over the past six months, the rate of unemployment in the local economy grew at a fast pace of 1.6%," he said. "The unemployment rate is expected to continue to increase at a fast pace in the coming months as a result of a slowing economy. We expect the rate of unemployment to rise to 8.5% in 2010." Speaking at a conference in Tel Aviv on Wednesday, Bank of Israel Governor Stanley Fischer said the economy was in the middle of a recession. The government was taking steps to moderate the recession, he said, but unemployment is expected to rise. "We are suffering from a great global economic crisis, and we expect the unemployment rate to rise close to 9%," Fischer said. Israel is "dealing better than the world with the economic crisis," Prime Minister Binyamin Netanyahu said Thursday in the Knesset. In the February-April period, exports of goods, not including diamonds, fell 8%, following a decline of 13.4% in the previous three months, while imports of raw materials dropped 11.6%, the bureau reported Thursday. In the February-March period of this year, manufacturing production declined 4.8% compared with 12.8% in the previous three months, and trade and services revenues fell 2.1%, the bureau said. In the first quarter of this year, the labor force totaled 3.01 million, including 228,000 unemployed, the bureau reported. The percentage of unemployed aged 26-64 rose to 6.8% in the first quarter, up from 5.7% in the previous quarter. The Central Bureau of Statistics defines an unemployed person as someone who did not work at all during the surveyed week, actively searched for work during the preceding four weeks and could have begun to work during the determining week had a job been offered. The rise in the unemployment rate was higher among women than among men during the first quarter, Eichel said. The bureau's figures indicated that the unemployment rate among women aged 26-64 rose to 7% in the first quarter, up from 5.9% in the preceding quarter. The unemployment rate for men aged 25-64 rose to 6.5%, up from 5.5%. The unemployment rate rose across all parts of the country in the first quarter. Unemployment was highest in the South, with a rate of 9.2%; followed by the North, at 8.9%; Jerusalem, at 8.4%; the Haifa area, at 7.1%; the central plain, at 6.7%; and the Tel Aviv area, at 6.1%. The education sector had the biggest drop in number of people employed, falling 7,800 to 347,000. The food and hospitality sector was down 7,300 to 124,000. The biggest rise in the number of employed was found in the health-services and welfare sector, which added 10,400 jobs to 291,000. Bloomberg contributed to this report.