Job creation picks up steam, unemployment rate reaches two-year low

JOB CREATION PICKS UP STEAM, UNEMPLOYMENT RATE REACHES TWO-YEAR LOW…. After a relatively encouraging jobs report a month ago, there were widespread fears that unexpected developments — a spike in oil prices, crises in Japan, Portuguese debt crisis — may undermine the employment market in March.

The benchmark, as the NYT‘s David Leonhardt noted this morning, was the first digit of today’s new report. If the jobs report began with a 2, it would be good news. If not, there was cause for concern.

This, therefore, is what we wanted to see.

The United States economy added 216,000 jobs in March, the Labor Department reported Friday, adding to hopes that hiring was finally on a steadier track despite concerns about overseas turmoil.

The gain in jobs slightly exceeded economists’ expectations. The unemployment rate continued to decline, to 8.8 percent.

The 8.8% unemployment rate, while obviously still way too high, is now at its lowest level in two years. What’s more, the 216,000 created in March was the best month in about a year, and improved upon February’s encouraging numbers.

Also note, the total would have been even higher had it not been for state and local budget cuts — the private sector added 230,000 jobs, but the public sector lost 14,000 jobs. Those were jobs that could have been saved were it not for conservative fiscal policies.

Nevertheless, this is the second good jobs report in as many months, and offers hope that the employment market is finally getting back on track. So far in 2011, the economy has added 478,000 jobs — and that just covers three months.

To be sure, to have robust growth that would bring the unemployment rate down in a hurry, we’d need to see even stronger employment numbers, but given the hole we’ve been in, what we’re looking for a significant steps in the right direction. That’s exactly the news we received today.

Just as encouraging, the totals from January and February were both revised upwards, albeit a little.

From a purely political perspective, policymakers would ideally look at figures like these, and consider ways to keep the momentum going. Regrettably, congressional Republicans continue to fight for spending cuts that are projected to cost the U.S. economy 700,000 jobs. This morning’s report should offer Washington a big hint: if we want more good news, the GOP plan needs to be rejected.

Once again, here’s the homemade chart I run on the first Friday of every month, showing monthly job losses since the start of the Great Recession. The image makes a distinction — red columns point to monthly job totals under the Bush administration, while blue columns point to job totals under the Obama administration.

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