By John S. McClenahen If the U.S. actually sheds jobs again this month, the American economy is probably in recession. So says Bruce Steinberg, chief economist at Merrill Lynch & Co., New York. Steinberg's statement is significant, because all through the current slowdown he has been the most bullish of the leading forecasters. But he's not yet ready to use the "R" word, claiming that "despite the decline in March payrolls, it is premature to say the economy has tilted into recession." Nevertheless, March employment was weaker than generally expected. Payrolls fell by 86,000 while the overall U.S. unemployment rate rose to 4.3%, the highest level in nearly two years, reveal U.S. Labor Dept. data. Manufacturing alone lost 81,000 jobs in March, the eighth consecutive month of decline. Since June 2000 manufacturing employment has fallen by more than 450,000 jobs, calculates the National Assn. of Manufacturers (NAM), Washington. "The rise in the unemployment rates poses a threat to consumer confidence that will keep retail sales on shaky grounds," says Maury Harris, New York-based economist for UBS Warburg LLC. "This is the first time throughout the entire slowdown that payrolls actually have declined, and the risk is that lower employment will result in weaker consumer demand," says Dave Huether, NAM's director of economic analysis. During the next three weeks, Federal Reserve chairman Alan Greenspan could answer the question now on just about every manufacturing executive's mind: Will short-term interest rates be lowered before the next scheduled meeting of the Federal Open Market Committee on May 15.