US jobless rate falls to two-year low of 8.8%

The US unemployment rate has fallen for the fourth straight month in March, to 8.8 per cent from 8.9 per cent in February, official data has shown.

It was the lowest jobless rate since March 2009 thanks to stronger job creation, the Labour Department said in a report signalling a turnaround in the troubled labour market.

“The labour market is beginning to gain some momentum, with a second month of solid growth,” said Sophia Koropeckyj of Moody’s Analytics.

Most analysts had expected the unemployment rate would hold steady at 8.9 per cent.

The economy added 216,000 non-farm jobs last month, an increase of 11 per cent from February, the department reported.

The number of new jobs sharply topped the consensus forecast of 185,000.

The February payrolls number was revised slightly higher, to 194,000.

Total payroll employment has grown by 1.5 million since a recent low in February 2010, the department said.

The private sector continued to lead job creation, adding 230,000 jobs in March, down 10,000 from the prior month but much stronger than the 203,000 expected.

The Labour Department highlighted gains in professional and business services, health care, leisure and hospitality, and mining.

Manufacturing, the key sector driving the recovery, continued to add 17,000 jobs in March.

Cash-strapped federal, state and local governments, struggling with lower tax revenues as the economy recovers from deep recession, shed 14,000 jobs.