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2011-04-04 05:38:34
The US unemployment rate fell to a new two-year low in March of 8.8%, from 8.9%
in February.
It was the fourth monthly fall in a row. The unemployment rate has fallen by a
percentage point during the last four months.
Employers created 216,000 jobs in March, the US Department of Labor said,
higher than market expectations.
Other economic data showed a slight dip in manufacturing in March, although the
report was seen as broadly positive.
The Institute for Supply Management's (ISM) index of national factory activity
dipped to 61.2 last month from 61.4 in February.
February's rate was the highest since May 2004. Any reading above 50 indicates
growth.
US and European stock markets were boosted by the economic news. London, Paris
and Frankfurt all closed with gains of more than 1.5%, while the Dow was up 1%
by late afternoon.
Continuing recovery
Continue reading the main story
Analysis
John Mervin New York business editor, BBC News
With this jobs report it does appear the economy has reached a real turning
point.
Not just a theoretical one, only of interest to economists either, but one that
might actually lead to an improvement in the lives of millions. Because if
about 200,000 new jobs are created each month then, slowly, America will get
back to work.
Barring the one-off hiring of census workers in 2010, it is four years since
more than 150,000 jobs were created in two consecutive months.
The US may finally be pulling away from the worst economic collapse since the
Great Depression. But it is only a turning point. There is a long way to go.
More than 13 million Americans who want full-time work, haven't found it yet.
Most of the new jobs were created in the private sector, in factories, shops
and health care, as well as in education and several professional and financial
services.
David Sloan of IFR Economics said: "This [the jobs report] suggests the
recovery is continuing."
The new private sector jobs offset job losses in the public sector, mainly
resulting from cuts by local government.
"The numbers are obviously good and one can hope that we will continue to see
the market rise in continuing months," said Bernard Baumohl, managing director
and chief global economist of Economic Outlook Group.
If employers keep on creating jobs at this pace, as many economists expect,
there will be a further 2.5 million new jobs in the US by the end of the year.
unemployment figures
"The steep decline in the jobless rate and the solid employment growth in
recent months are encouraging," said the chairman of the Council of Economic
Advisers, Austan Goolsbee, in a post on the White House blog.
That will do little, however, to alleviate widespread concerns that the
economic recovery in the US is failing to create enough jobs to make up for the
7.5 million lost during the recession.
"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," Mr Goolsbee
acknowledged.
Inflation fears
Analysts were also worried about the possible impact of rising oil and other
commodity and energy prices.
"There's a nagging concern that the job outlook may be in jeopardy as energy
prices keep escalating," said Mr Baumohl.
"That will put a squeeze on household spending and business investments, and
one has to wonder whether we'll see the pace of hiring slow as a result."
However, others pointed to slow wage growth, which could offset the impact of
higher energy and commodity prices.
"Soft earnings still highlight that underlying inflation pressures are going to
be restrained," said David Mann, regional head of research for the Americas at
Standard Chartered in New York.
Earlier this week, the US Department of Commerce unexpectedly cut its estimate
of fourth-quarter growth to an annualised rate of 2.8%, from 3.2% previously.