April 15 (Bloomberg) -- New Jersey’s unemployment rate climbed to 8.3 percent in March, the highest since December 1992, as hotels and restaurants cut jobs to cope with declining consumer spending.

Employers in the state eliminated 17,200 positions last month, with the biggest contraction, 5,900 jobs, in the leisure and hospitality industry, the state’s labor department said in a statement today.

“Casino hotels in Atlantic City have been especially hard hit by the economic slowdown, leading to layoffs and other staff reductions,” the department said in the statement.

Atlantic City’s casino revenue fell the most on record in March, tumbling 19.4 percent from a year earlier because of the U.S. recession and competition from neighboring states.

Gambling proceeds at the resort city, the second-biggest U.S. casino center, dropped to $318.4 million, the New Jersey Casino Control Commission said on April 9. Revenue from tables at the 11 casinos declined 15 percent to $100.3 million, while slot-machine play slid 21 percent to $218.1 million from a year earlier.

The state’s jobless rate is up from 8.2 percent in February, which was the first time it had exceeded the national level since October 2006. The rate was 4.8 percent in March 2008. The last time New Jersey’s jobless rate exceeded 8.3 percent was 8.4 percent in December 1992, according to state labor data.

Governor Jon Corzine, a first-term Democrat seeking re- election in November, said earlier this year he expected New Jersey’s jobless rate to remain below the national average.

The U.S. rate jumped in February to 8.1 percent, the highest level in more than a quarter century, and then in March it climbed to 8.5 percent.

To contact the reporter on this story: Stacie Servetah in Trenton, New Jersey, at sbabula@bloomberg.net.

Last Updated: April 15, 2009 11:50 EDT