Unemployment rate drops to 4.7%
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March unemployment slips to 4.7%

WASHINGTON - Employers added 211,000 jobs in March and the unemployment rate unexpectedly slipped back to a 4-1/2-year low 4.7%, the government said Friday.

The report is likely to keep concern about potential inflation on the front burner.

The pace of hiring last month was stronger than the 190,000 jobs that had been forecast by analysts, who also had expected the unemployment rate to be unchanged at February's 4.8%. The March rate ended up matching January's jobless rate, which was the lowest in 4 1/2 years.

STATE RATES: A lot depends on where you live.

The Labor Department modestly revised down new hiring in February to 225,000 jobs instead of the 243,000 reported last month. Labor said January new jobs totaled 154,000 instead of 170,000 - a cumulative reduction of 34,000 in the number of jobs created over those two months.

President Bush, whose poll standings have been falling in recent months, said at the White House that the newest figures make an argument for extending and renewing his tax cuts.

"Some are now proposing that we raise taxes either by repealing the tax cuts or letting them expire," he said. "These are the same politicians who told us that letting the American people keep more of their own money would be reckless and irresponsible. They were wrong then and they are wrong now."

Wage growth was less robust than forecast, as average hourly earnings rose 0.2% to $16.49 rather than the 0.3% expected by economists. Over the 12 months through March, wages rose 3.4%, down from 3.5% in the 12 months through February.

Not every sector recorded job growth in March. Manufacturing employment declined 5,000 after shrinking 10,000 in February and transportation industries shed 7,600 jobs last month. But overall hiring in service businesses grew 202,000 last month after increasing 194,000 in February. Goods-producing industries increased payrolls overall by 9,000 in March, fewer than the 31,000 new hires in February.

The report showed the average time that the unemployed spent searching for work in March was 16.9 weeks, down from 17.6 weeks in February.

The employment figures come against the backdrop of a rebounding economy. Analysts believe the economy emerged from an end-of-year funk and grew at an annual rate of 4.5% or higher in the just-ended January-to-March quarter. The economy is expected to moderate in the April-to-June quarter but still turn in a good performance.

Contributing: Associated Press
USA Today ~ Reuters ** March unemployment slips to 4.7%

Statement of
Kathleen P. Utgoff -- Commissioner
Bureau of Labor Statistics

Nonfarm payroll employment rose by 211,000 in March, following an increase of 225,000 in February. During the 12 months ending in March, monthly employment growth averaged 174,000. Over the month, there were widespread job gains in the service-providing sector. The unemployment rate was little changed at 4.7 percent.

Employment in professional and business services rose by 52,000 in March. Several component industries continued to add jobs, including architectural and engineering services, computer systems design, management and consulting services, and services to buildings and dwellings.

The leisure and hospitality industry added 42,000 jobs over the month, largely due to a sizable gain in food services and drinking places. Health care employment increased by 24,000, reflecting continued growth in hospitals, physicians' offices, and home health care services.

A large job gain in general merchandise stores pushed employment in retail trade up by 29,000 in March. Wholesale trade continued to add workers over the month. Financial activities added 16,000 jobs, with continued growth in credit intermediation and in insurance.

In the goods-producing sector, mining employment continued to grow in March, largely in support activities in oil and gas. Employment in manufacturing was about unchanged, as a gain in computer and electronic products was offset by job losses in textile mills and in plastics and rubber products. Construction employment also was essentially unchanged in March, after rising by 81,000 in the previous 2 months.

Average hourly earnings for private production or nonsupervisory workers rose by 3 cents in March, following an increase of 6 cents in February. Over the year, hourly earnings increased by 3.4 percent. The average workweek was unchanged in March, at 33.8 hours. The manufacturing workweek and overtime hours also were unchanged, at 41.0 and 4.5 hours, respectively.

Turning to data from the household survey, both the number of unemployed persons (7.0 million) and the unemployment rate (4.7 percent) were little changed in March. Over the year, the unemployment rate has come down from 5.1 percent. Total employment and the labor force continued to trend up in March. The number of persons working part time for economic reasons edged down over the month.

This month, we again report on the labor force status of survey respondents who evacuated from their homes due to Hurricane Katrina. The data are derived from a special set of questions that have been included in the household survey since October to gather information about evacuees. The estimates do not account for all persons who evacuated from their homes due to the hurricane; information is not gathered on those evacuees who remain outside the scope of the survey, such as those currently living in hotels or shelters.

Data for March indicated that there were about 1 million persons age 16 and over who evacuated from their August residences due to Hurricane Katrina. In March, about one-half of the evacuees were again living in the homes they vacated in August. Among Katrina evacuees identified in March, 53.6 percent were in the labor force, and their unemployment rate was 16.5 percent. Unemployment rates were much lower for those evacuees who were living at their pre-Katrina residences (5.3 percent) than for those who were living elsewhere (34.7 percent).

To summarize the labor market data for March, nonfarm payroll employment rose by 211,000, following a gain of 225,000 in February. The unemployment rate was about unchanged in March at 4.7 percent.

Bureau of Labor Statistics ~ Kathleen P. Utgoff ** Unemployment down to 4.7% (PDF File)