US jobless rate falls to two-year low

The US private sector boosted hiring in March, driving the unemployment rate to a two-year low, the government said Friday in a report signaling a turnaround in the troubled labor market.

While still high at 8.8 percent, it was the lowest jobless rate since March 2009 thanks to a solid rise in nonfarm payrolls, the Labor Department reported.

"It looks like the jobs logjam is being broken as the private sector is starting to crank up the hiring machine," said Joel Naroff of Naroff Economic Advisors.

Job-seekers wait in line for assistance at a government-run employment center in Las Vegas, Nevada in 2010

The fourth straight drop in the rate was unexpected, as forecasts had it holding steady from 8.9 percent in February.

The key unemployment number has shed a full percentage point since November, the first such drop since 1984, as the economy fights back from a recession that officially ended more than a year and a half ago.

President Barack Obama, speaking at a UPS facility in Landover, Maryland after the jobs numbers were released, said the economy was showing "signs of real strength."

"Now, despite that good news, everybody here knows we have a lot more work to do. There are still millions of Americans out there who are looking for a job that pays the bills," Obama said.

The number of unemployed persons stood at 13.5 million, while the size of the labor force was little changed.

Heidi Shierholz at the Economic Policy Institute called for a "reality check" on the report, highlighting that the labor force participation rate held steady at its lowest point of the recession and its lowest point in 27 years. "Millions of workers who dropped out of -- or never entered -- the labor force during the downturn continue to wait on the sidelines, not yet optimistic enough about the prospect of finding a job to begin looking for work," she said.

Austan Goolsbee, chairman of Obama's Council of Economic Advisers, noted that the last two months of private job gains had been the strongest in five years.

The economy added 216,000 nonfarm jobs in March, the Labor Department said, an increase of 11 percent from February and the sixth consecutive month of overall job gains.

The snap-back in February job creation after a winter storm-depressed January was revised slightly higher, to 194,000.

The vast private sector added net jobs for the 13th straight month -- 230,000 after 240,000 in February -- a positive sign in the face of winding-down government stimulus spending.

The service sector, more than two-thirds of the world's biggest economy, produced the lion's share at 199,000 positions.

Professional and business services, health care, leisure and hospitality, and mining all posted gains.

Manufacturing, the key driver of the recovery, continued to add jobs but at a sharply slower pace in March -- 17,000 -- under pressure from the embattled construction sector.

A separate ISM index released Friday showed manufacturing activity remained at a six-year high in March.

The Labor Department report showed the continued loss of jobs in the public sector as governments struggled to offset lower tax revenues. Government employment fell by 14,000 jobs.

"The March employment report was probably the best in four years, i.e. when first signs of the impending recession emerged," said Harm Bandholz, chief US economist at UniCredit Research.

"We think that employment gains will accelerate further in the course of the year, and continue to expect about 2.5 million additional jobs in calendar 2011," he said.

Total payroll employment has grown by 1.5 million since a recent low in February 2010, the Labor Department said.

AFP

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