by Richard Skylar
WASHINGTON — Nonfarm payrolls grew by a seasonally adjusted 216,000 in March, their fastest pace since last May, the Labor Department said Friday, in an indication of an improving labor market.
According to the survey of 400,000 business establishments, private-sector payrolls increased by 230,000 jobs after rising by 240,000 in February, marking the first time that private-sector job gains have been over 200,000 for two straight months in five years.
The payrolls growth came in stronger than the 185,000 increase expected by economists surveyed by MarketWatch.
Financial markets took the report as a positive sign for the outlook. Stocks (DOW:DJIA) jumped in morning trading. Treasury yields (U.S.:UST10Y) and the dollar (BOARD:DXY) rose.
“If we continue to see reports like this, the Fed could tighten as early as first quarter 2012,” said Ethan Harris, head of developed markets economics research at Bank of America Merrill Lynch. Some Fed officials themselves said the tightening could come this year.
The nation’s unemployment rate fell to a seasonally adjusted 8.8% in March from 8.9% in February, according to a separate survey of 60,000 households. This is the lowest unemployment rate since March 2009. Economists had been expecting the jobless rate to inch higher to 9.0%. The rate has declined sharply from 9.8% last November.
“The speed of the decline in the unemployment rate already is putting pessimists to shame,” said Robert Brusca, chief economist at FAO Economics.
Unemployment dropped by 131,000 to 13.5 million for March, while employment rose by 291,000 to 139.9 million.
An alternate measure of employment, which includes discouraged workers and those forced to work part-time because of the weak economy, fell to 15.7% from 15.9%.
There was only a small cumulative 7,000 upward revision to payrolls count in January and February.
Payrolls rose by a revised 194,000 in February and by 68,000 in January.
There were few dark spots in an otherwise strong report.
Government employment fell by 14,000 in March. This was the fifth straight monthly decline.
Local governments have been especially hard hit, losing 416,000 jobs since the peak in September 2008.
Average hourly earnings were flat at $22.87. On a year-over-year basis, earnings were up 1.7%. This is below the 2.2% year-over-year increase in the consumer price index in February.
The average workweek was unchanged at 34.3 hours.
Job growth in March was concentrated in the service sector. Gains occurred in health care and leisure. Temporary-help services rose by 29,000.
Payrolls in goods-producing industries rose by 31,000 last month, including 17,000 in manufacturing, the fifth straight increase.
But manufacturing hours fell to 40.5 hours from 40.6. Factory overtime was unchanged at 3.3 hours.