Healthy Job Growth Pushes Unemployment Down

By Toni Vranjes

April 1, 2011

Employers boosted payrolls by 216,000 in March, showing that they continue to be in the mood to hire.

The expansion sent the jobless rate down slightly, from 8.9 percent in February to 8.8 percent last month. The overall trend in the unemployment numbers has been encouraging. Over the past four months, the unemployment rate has dropped by one percentage point.

Meanwhile, the Labor Department reported a decline in the “underemployment rate” — which includes part-time workers who would prefer to have full-time jobs, as well as people who have left the labor force entirely. The underemployment rate fell from 15.9 percent to 15.7 percent.

Employment growth occurred in several different industries: professional and business services, leisure and hospitality, health care, manufacturing and mining.

Overall, the private sector created 230,000 new jobs. But local governments shed 15,000 jobs as they continued cutting their budgets.

The Labor Department also revised its payroll numbers upward for the first two months of the year. The January employment gain was revised from 63,000 to 68,000, and the February increase went from 192,000 to 194,000.

However, an area of concern is an increase in the number of “long-term unemployed,” from 6 million in February to 6.1 million last month. This category refers to people who have been jobless for 27 weeks or longer.

The Obama Administration described the March employment report in rosy terms, highlighting the strength in private-sector job growth. Austan Goolsbee, chair of the White House Council of Economic Advisers, noted the country has experienced 13 consecutive months of private employment growth. He also emphasized the steady decline in the jobless rate.

“The full percentage point drop in the unemployment rate over the past four months is the largest such decline since 1984, and, importantly, it has been driven primarily by increased employment, rather than people leaving the labor force,” Goolsbee wrote in a blog post.

“As long as millions of people are looking for jobs, there is still considerable work to do to replace the jobs lost in the downturn,” he added. “Nonetheless, the steep decline in the jobless rate and the solid employment growth in recent months are encouraging. The last two months of private job gains have been the strongest in five years.”

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