US jobless rate dips to 8.9 per cent, nears 2-year low

Mar 4, 2011, 14:51 GMT

Washington - US unemployment edged down to 8.9 per cent in February, the lowest level in nearly two years as employers added 192,000 jobs to the economy, the Labour Department reported Friday.

It marked the first time the jobless rate fell below 9 per cent since April 2009. The rate dropped from 9 per cent in January and is down from 9.8 per cent in November, a sign that the long-struggling US labour market is beginning to show signs of a turnaround.

The February gains were led by sectors that have suffered since the 2008-09 recession, including manufacturing and construction. The 192,000 net jobs added was the largest amount since May 2010.

'It's a very solid number,' said White House economic advisor Austan Goolsbee told US broadcaster CNBC. 'What we see today is a promising move forward.'

Yet US stocks fell slighly on opening in New York as the data was in line with economists' expectations. There was also caution as the size of the labour force remained unchanged, meaning many people who quit during the recession remain reluctant to re-enter the market.

President Barack Obama has long been frustrated by a labour market that has remained week despite the country's return to growth. The US economy expanded by 2.8 per cent in 2010, yet unemployment remained between 9-10 per cent through the year.

Policymakers have remained cautious about predicting a quick strengthening of the job market. The Federal Reserve has forecast that the unemployment rate will remain near its current level for the remainder of 2011.

Fed Chairman Ben Bernanke has warned it will be 'several years' until the jobless rate returns to the 4-6 per cent levels seen before the 2008 financial crisis plunged the world into its worst recession in generations.

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