Unemployment Rate Falls Again to 8.8%

The unemployment rate fell to a two-year low of 8.8 percent in March and companies added workers at the fastest two-month pace since before the recession began.

The Labor Department reported Friday that the economy added 216,000 new jobs last month, offsetting layoffs by local governments. Factories, retailers, education, health care and an array of professional and financial services expanded payrolls.

The second straight month of brisk hiring is the latest sign that the economy is strengthening nearly two years after the recession ended.

Private employers, the backbone of the economy, drove nearly all of the gains. They added 230,000 jobs last month, on top of 240,000 in February. It was the first time private-sector hiring topped 200,000 in back-to-back months since 2006 - more than a year before the recession started.

The unemployment rate dipped from 8.9 percent in February to 8.8 percent in March. The rate has fallen a full percentage point over the last four months, the sharpest drop since 1983.

"The U.S. labor market is finally making some serious progress. No fooling," said Sal Guatieri, economist at BMO Capital Markets Economics.

Economists predict employers will add jobs at roughly the same pace for the rest of this year. That would generate about 2.5 million new positions. But that will make up only a small portion of the 7.5 million jobs that were wiped out during the downturn.

One reason for the lower unemployment rate is that many people who stopped looking for a job during the recession still aren't looking for one. So they're not counted as unemployed. The proportion of people who either have a job or are looking for one is surprisingly low for this stage of the recovery.

If many of them start looking for work again, they will be counted as unemployed. So the unemployment rate could go up, even if the economy adds jobs.

And the economy faces pitfalls. Local governments, wrestling with budget shortfalls, cut 15,000 workers last month and are expected to keep shedding jobs. Home prices are falling amid weak sales and a record number of foreclosures. Higher food and gas prices are leaving consumers with less disposable income to spend on other goods and services.

Workers' paychecks were flat in March. Average hourly earnings held steady at $22.87, unchanged from February. Workers have little bargaining power to demand big pay raises because the job market is still healing slowly.

The number of unemployed people dipped to 13.5 million in March, still almost double since before the recession began in December 2007.

Including part-time workers who would rather be working full time, plus people who have given up looking altogether, the percentage of "underemployed" people dropped to 15.7 percent in March.

Professional and business services, including accountants, bookkeepers, engineers and computer designers, added 78,000 positions, the most since November. Of those, 29,000 were temporary positions.

Factories added 17,000 jobs in March, marking the fifth straight month of gains. Retailers added nearly 18,000 jobs, after cutting them in February. Financial services expanded payrolls by 6,000, following two straight months of cutbacks. Education and health services expanded employment by 45,000, leisure and hospitality added 37,000 jobs.

Aside from layoffs by local governments, other sectors eliminating jobs included construction, transportation and warehousing, and information services, such as telecommunications. State government hiring was flat, after four straight months of layoffs.

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Very true. Furthermore, the amount of underemployed people would make the figure look even more atrocious. I wonder how many are out there that need to work fulltime but cannot get anything more than part-time...

May 24 2011 at 3:10 PM Report abuse rate up rate down Reply

Unemployment % doesn't count the people without jobs and not collecting Unemployment $ from the government. When the people are past the 99 weeks, they are dropped from the percentage. They are still without a job. The true number would surprise the nation and the world. I guess 8.8% looks better even though 16.6% are unemployed.

April 27 2011 at 8:28 AM Report abuse rate up rate down Reply

Data will reflect higher unemployment as soon as the sting of higher fuel prices really takes hold. Sorry Mr. O.

April 21 2011 at 2:52 PM Report abuse rate up rate down Reply

That because most unemployed are running out of there extenion money thats why.

April 18 2011 at 2:19 PM Report abuse -1 rate up rate down Reply

they always say that just when everyones unemployment is going to run out

April 13 2011 at 12:55 PM Report abuse -1 rate up rate down Reply

What have the dems done? Passed legislation in 2007 that took money away from big oil and steered it toward our auto industry for R&D with mandates for better mileage and now low and behold we have suv's that get 32 mpg as well as waiting lists for chevy volts (almost all US auto workers are back to work), electric batteries being built here (500 at just one plant that pays $14 to $18/hour), and charging stations being made in this country. They eliminated the tax incentives for corporations to go overseas, they eliminated the 5.25% tax rate for those overseas profits, they passed legislation for 100% write offs for improvements made in this country that has demand way up for machinery and equipment, they gave the IRS the resources to go after offshore accounts with over 14,000 coming forward, they passed banking legislation that addresses the problems of the 2002 banking legislation that allowed predatory lending and less govt oversite on wallstreet, they've created 1.3 million jobs in 13 months, manufacturing and export gains for 20 months, and more. What's the gop done? Cut jobs and wages while handing even more over to corporate tax cuts.

And more good news: Retail sales up again, and unemployment claims continue to decline. 1.3 million jobs in 13 months, 20 months of manufacturing and export gains, demand for machinery and equipment up. All those manufacturing paychecks are coming back into communities and creating demand for goods and services just like the economists said.

April 12 2011 at 12:40 AM Report abuse +1 rate up rate down Reply

this 8.8 is wrong more poeple have giving up looking for work. over a million.and much much more have ran out of there unemployment benefits.??????

April 11 2011 at 2:37 PM Report abuse -1 rate up rate down Reply
1 reply to John's comment

Not true. ADP - payroll processing for businesses can back up govt figures by their additions to payroll.

April 11 2011 at 5:57 PM Report abuse +1 rate up rate down Reply

Ceo for home builders says demand is up for green more efficient homes. As those manufacturing paychecks start coming back into communities (as they are - just reported retail sales are up) demand for goods and services goes up which leads to more jobs, our tax base returns, the natl debt goes down, and the value of our dollar goes up.

April 07 2011 at 11:54 AM Report abuse +1 rate up rate down Reply

MIKE: Those green jobs are in my backyard. Electric battery plants are hiring over 600 that pays $12 to $18 an hour. Wind turbines also paying $12 to $18 an hour. These were the ground breaking ceremonies attended by Obama that the gop said was campaigning and complained about using tax dollars to help get them up and going. They were also slated for overseas under Bush but low and behold good paying jobs created right here. And the 100% write offs for improvements made in this country passed by dems has demand for machinery and equipment going strong. Caterpillar stock has doubled in the last year. And the new $45 billion trade agreement with China hasn't kicked in yet, as well as South Korea and South America. Dems policies and legislation work for american workers and this is why they vote democrat.

April 07 2011 at 11:51 AM Report abuse +1 rate up rate down Reply

Mike - 276 permits have been issued under Obama with 39 issued since June 1010.

April 07 2011 at 11:46 AM Report abuse +1 rate up rate down Reply