*Obama pushes recovery plan in Ohio
*Dismal new unemployment figures add to gloom
*Conservative analysts blame slide in part on Obama (Adds update on stock market, paragraph 4)
By John Whitesides
WASHINGTON, March 6 (Reuters) - President Barack Obama tried to highlight some good news and tout his economic plan on Friday, but the grim reality of plunging employment and faltering stock markets once again stepped on his message.
Obama headed to hard-hit Ohio to attend a graduation ceremony for 25 Columbus, Ohio, police recruits whose jobs were saved by money from the $787 billion stimulus package he signed into law last month.
But the visit, the latest in a series of Obama road trips to push his economic plans, coincided with a Labor Department report that employers cut a higher than expected 651,000 jobs in February, pushing the jobless rate past 8 percent, a 25-year high.
U.S. stocks inched up on Friday, with the Dow Jones industrial average up 0.49 percent. That bucked a downward spiral that has seen stock indexes drop by double-digits since Obama's January inauguration.
Obama faces a rising tide of Republican criticism and Wall Street worries about his economic approach. Some conservative market analysts lay at least partial blame for the slide on policies he has adopted since taking over in January with the economy already in crisis.
For the White House, the grim economic news has made it hard to find the right balance of blunt talk about the present and optimism for the future.
"As the president has often said, it's going to get worse before it gets better," spokesman Robert Gibbs said on Air Force One as Obama headed to Ohio to tout a minor victory for his plan.
Since Obama's inauguration on Jan. 20 the DJ Wilshire 5000 <.DWC>, one of the broadest measures of shares traded in the United States, is down 14.84 percent or $1.4 trillion through Thursday.
HONEYMOON OVER?
"At least on Wall Street, the honeymoon is over for President Barack Obama," a Business Week magazine column declared.
Conservative critics say some investors are unsettled by Obama's big-ticket economic solutions, including the stimulus plan and a $3.5 trillion budget proposal for next year, along with his plan to raise taxes on the wealthiest Americans.
They have also questioned what they say is a lack of clear solutions to unlocking credit and easing the housing crisis.
Michael Boskin of Stanford University, who chaired the Council of Economic Advisers under former President George H.W. Bush, said in the Wall Street Journal the market sell-off could be blamed in part on "the realization that our new president's policies are designed to radically re-engineer the market-based U.S. economy."
Obama has shrugged off the critics and refused to bow to pressures from Wall Street, saying he is not concerned with the gyrations of the stock market.
He announced a White House conference next Thursday with officials from all 50 states to come up with the most effective ways to spend the stimulus money.
In Ohio, he again urged Americans to keep their eye on the big picture and give his recovery plan, which he says will save or create at least 3.5 million jobs over the next two years, time to work.
"Because of this plan, stories like the one we are celebrating here in Columbus will soon take place all over this nation," he said on Friday. "All of this takes time and it will take patience."
The 25 officers had been expected to be laid off before Columbus received about $4 million in stimulus money, but can now graduate. The city does not have the money for another graduating police class.
'SMALL VICTORIES' FOR OBAMA
Obama said such small victories were being repeated around the country, but admitted "we've got big challenges ahead of us."
"We inherited a big mess," he said.
Friday's job numbers sparked another round of criticism from Republicans, however, and more pleas for help from groups wrestling with the continued bad news.
"Even as Americans' job prospects grow dimmer, their savings evaporate and their budgets tighten, Washington Democrats seem more determined than ever to continue pursuing tax hikes and pork-barrel spending increases," House Republican Leader John Boehner said.
Scott Paul, executive director of the Alliance for American Manufacturing, pointed to another 168,000 manufacturing jobs lost in February.
"This is a grim moment for American workers," he said. "The economic recovery package passed last month was a good first step, but more needs to be done." (Additional reporting by David Alexander in Ohio; Editing by David Storey and Todd Eastham)