Unemployment Rate Continues to Fall

By Toni Vranjes

March 4, 2011

The U.S. job market headed in an encouraging direction last month, as employers added 192,000 jobs and the unemployment rate dropped to 8.9 percent.

The jobless rate has been falling since November, when it stood at 9.8 percent. The 0.9 percentage point drop over the past three months is the largest such decline since 1983, noted Austan Goolsbee, chair of the White House Council of Economic Advisers, in a blog post. He added that the falling unemployment rate has been driven primarily by higher employment, rather than a drop in labor-force participation.

The employment growth in February was spread across a wide array of sectors: professional and business services, health care, manufacturing, construction, and transportation and warehousing.

The construction industry enjoyed a particularly healthy rebound. Construction payrolls fell by 22,000 in January, but employment jumped by 33,000 last month. The steep decline in January may have reflected the impact of harsh weather, according to the Labor Department. Severe storms forced employees in certain regions to miss work. If those workers missed the entire pay period that included the 12th of the month — and therefore didn’t get paid — then they were excluded from the payroll-employment figures.

Despite the progress, the road ahead is daunting. Since the start of the recession in December 2007, the U.S. economy has lost nearly 7.5 million jobs.

“The steep decline in the unemployment rate and the overall trend of economic data in recent months has been encouraging, but there is still considerable work to do to replace the jobs lost in the downturn,” Goolsbee wrote.

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