Unemployment Rate Drops to 4.4 Percent

Unemployment fell in March to 4.4 percent as a rebound in construction hiring helped the economy add 180,000 jobs over the month, a better showing than expected, the government reported today.

Hiring in the education, health care and retail sectors was also strong, amid signs that the country's labor market remained tight.

Despite concerns that the economy was losing steam, the March unemployment data mark the second consecutive monthly decline, pushing the jobless rate to a level touched briefly last fall but not seen before that since 2001. Average hourly wages increased by six cents over the previous month, to $17.22, a 4 percent increase from the year before.

The new report is consistent with the stance taken by the Federal Reserve at its last meeting. Interest rates were held steady at that session, with the Fed concluding that the economy was in generally solid shape and the risk of inflation remaining its central focus.

A downturn in the housing and automotive industries had prompted concern that the economy was slowing, leading some analysts to predict that the Fed would lower interest rates sometime this year to spur growth.

But today's job report makes that outcome less likely. The rise in wages should help keep consumer spending on track -- an important element in economic growth that makes up for about two-thirds of economic activity. And the drop in unemployment is just one sign that the demand for labor remains firm.

When the unemployment rate fell in February, for example, some analysts noted that the decrease stemmed in part from the fact that 190,000 people had stopped looking for work -- and therefore were not counted in the unemployment rate because they are not considered part of the labor force.

In March, however, the labor force grew by 195,000 people, numbers absorbed into the economy through hiring that was strong almost across the board.

Estimates of the number of jobs added in January and February were also increased, from 146,000 to 162,0000, and from 97,000 to 113,000.

"It substantiates what we were thinking, that the job market continues to be good," said Roy Krause, president and chief executive of Spherion Corp., a staffing and recruiting firm. "It's a good business environment."

The country's longstanding slide in manufacturing employment continued. That sector lost another 16,000 jobs. Hiring among professional and business services firms also declined by around 7,000 jobs.

But the construction trades rebounded from a dismal February in which bad weather and a weak housing market led to a decline in employment of 61,000. In March, the sector added 56,000 jobs,

Education and health services firms added 54,000 jobs, while retail companies added 36,000 jobs.