US unemployment rate falls to 8.9%

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The US unemployment rate fell slightly to 8.9% in February, down from 9% the month before.

It is the third month in a row that the jobless rate has fallen, with February's figure marking a near two-year low.

Employers added 192,000 jobs last month, the US Labor Department said, above market expectations.

President Barack Obama said the jobs figures showed progress in the US economy.

He said the country needed to "keep building on that momentum."

A Labor Department statement said that most job gains were in manufacturing, construction, business services and transport.

Analysis

With jobs being created in virtually all sectors, February's employment report was the most positive we've seen in a while. But the reality is still sobering.

The unemployment rate remains stubbornly high, with more than 13 million Americans out of work. As the Chairman of the Federal Reserve, Ben Bernanke testified this week, the current jobs growth is not enough to recover the millions of jobs lost during the recent recession.

And today's figures are only part of the story. They don't take into account those people who have given up looking for work or those who want full time employment but can only find part time jobs.

State and local government slashed 30,000 jobs, the most since November as budget cuts continue to bite.

The data showed that the jobless rate for adult men was 8.7%, for adult women 8%, and for teenagers 23.9%.

The unemployment rate has come down from 9.8% in November.

"We have moved into the expansion phase of the economic cycle and the economy is self-sustaining," said Brian Levitt, an economist at Oppenheimer.

'Underemployment'

Data for December and January was also revised upwards to show 58,000 more jobs created than previously estimated.

The total number of unemployed people now stands at 13.7 million, still almost double pre-recession levels.

The Labor Department estimated that, when factoring in the number of part-time workers who would rather be working full time and those who have given up looking for work, the percentage of "underemployed" Americans dropped to 15.9% in February.

This is the lowest in nearly two years.

The improving jobless rate reflects growth in the economy. Recent retail and export data have been healthier.

Manufacturing is growing at its fastest pace in nearly seven years and the service sector is expanding at its fastest pace for more than five years.

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