Unemployment falls to 2-year low of 8.8%

The U.S. job market maintained solid growth in the face of global turmoil last month, with enough jobs created to draw the unemployment rate down to a two-year low of 8.8 percent, the Labor Department reported Friday morning.

Businesses added another 216,000 jobs in March after creating 194,000 in February. Growth was particularly strong in professional and business services and health care, but spanned much of the spectrum of American industry from manufacturing to leisure and hospitality. Employers have created a total of 1.5 million jobs in the last year since the job market hit bottom.

The news is likely to come as a relief to both unemployed workers and investors, who feared that the break-out of turmoil in the Middle East, surging oil prices and a devastating earthquake in Japan might have dampened business plans to hire new workers. But the job market appeared to maintain the momentum it has been building this year despite these international concerns.

“While employers are keeping a close eye on world events, their confidence levels in regard to recruitment have remained intact,” said Matt Ferguson, chief executive of CareerBuilder, an employment firm whose surveys found the strongest hiring in three years in the first quarter.

“Job listings on CareerBuilder are up across all categories, from health care and technology to manufacturing,” he said. Nearly a third of employers are adding workers, and the same number plan to keep hiring in the spring quarter, he said.

“More jobs and rising wages support the case for income gains,” said John E. Silvia, chief economist at Wells Fargo Securities. “The expansion continues.”

With the unemployment rate still elevated and job gains concentrated in some lower-paying areas such as temporary office work, growth in wages has been tepid since the onset of the recession in December 2007. Last month, growth in both average hourly earnings and average hours stalled at $22.87 and 34.3 hours, respectively, leaving workers with no increase in weekly take-home pay.

For those who are still employed, the pickings have been slim. The average wage gain has slumped to an annual rate of 1.7 percent from levels more than 4 percent before the recession. CareerBuilder found that nearly 40 percent of employers are providing their workers with no raises, and another 40 percent are providing less than 3 percent raises on average.

Nevertheless, the increase in jobs means that households are enjoying a measure of increased income that enables them to increase spending and support the economy, Mr. Silvia said.

After years of a nearly total job drought, last month’s solid increase in jobs “shows extremely welcome momentum in the labor market,” said Heidi Shierholz, economist with the Economic Policy Institute. “The jobs recovery is unmistakably gaining traction.”

Many unemployed workers hit by devastating layoffs during the recession continue to sit on the sidelines, however, discouraged by a lack of job opportunities. She said it could take many years for enough jobs to be created to put them back to work.