(April 1, 2004) - (Little Rock-AP) -- A quarterly economic forecast for the state shows that Arkansas is slowly recovering from major manufacturing job losses. The report by University of Arkansas at Little Rock economist John Shelnutt says the state's unemployment rate should drop as the state adds service-sector jobs. That sector includes retail sales, where pay can be lower than in the manufacturing sector. The report says Arkansas had an overall loss of two-tenths of one percent of jobs in 2003. Shelnutt predicts the state should see a gain of seven-tenths of one percent in jobs this year. Shelnutt also says the state's unemployment rate should decline from six-point-two percent in 2003 to five-point-three percent in 2004.