Employment jumps in March, jobless rate falls
U.S. employment jumps in March
A job seeker walks the floor at a large career fare at Rutgers University in New Brunswick, New Jersey, in this January 6, 2011 file photo.
Credit: Reuters/Mike SegarWASHINGTON |
WASHINGTON (Reuters) - Employment grew solidly for a second month in March and the jobless rate hit a two-year low of 8.8 percent, underscoring a decisive shift in the labor market that should help to underpin the recovery.
Nonfarm payrolls rose 216,000 last month, the largest increase since May, the Labor Department said on Friday. The gain built on the 194,000 new positions added in February.
The quickening pace of job growth has pulled down the unemployment rate a full percentage point since November.
A separate report from the Institute for Supply Management showed factory activity grew strongly last month, although it backed off a nearly seven-year high hit in February. It was still the 20th straight month of expansion.
The employment report confirmed the jobs market was strengthening despite signs economic activity had been held back early in the year by bad weather and rising energy prices. Still, the data was likely not strong enough to push the Federal Reserve off its ultra-easy monetary policy course.
"It provides more evidence that the economy is gaining a self-sustaining momentum, but it also says we still have a long way to go," said Julia Coronado, a senior economist at BNP Paribas in New York.
The economy has recovered only a fraction of the more than 8 million jobs lost in the recession. Economists say job growth of between 250,000 and 300,000 a month is needed to have a sizable impact on the pool of 13.5 million jobless Americans.
Investors on Wall Street cheered the sturdy employment report and lifted the blue-chip Dow Jones industrial average to its highest level since June 2008. U.S. government bond prices were little changed, while the dollar climbed to a more than six-month high against the yen.
The improvement in the labor market comes as Fed officials are sharply divided on whether the economy still needs monetary support. Some policymakers argue the recovery is still not strong enough, while others worry about inflation if interest rates are kept too low for too long.
NO WAGE PRESSURES
The report showed no price pressure from earnings, which were flat in March and have barely grown so far in 2011.
New York Fed President William Dudley said the growth in jobs was encouraging but cautioned against too much optimism.
"We are still very far away from achieving our dual mandate of maximum sustainable employment and price stability," Dudley said in Puerto Rico.
Investors reacted to the jobs report by increasing their bets on the Fed tightening credit by the end of 2011 but they rowed back a bit after Dudley's cautious comments on the state of the economy.
The private sector accounted for all the new jobs in March, adding 230,000 positions after February's 240,000 increase. Government employment fell 14,000, declining for a fifth straight month as local governments let go 15,000 workers.
A job seeker walks the floor at a large career fare at Rutgers University in New Brunswick, New Jersey, in this January 6, 2011 file photo.
Credit: Reuters/Mike Segar
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