American employment gains were solid in March for the second consecutive month, providing more evidence to support the moderate U.S. economic growth story. Even stronger job gains could be on the horizon as major companies have largely exhausted productivity gains with prior employment levels.

The U.S. economy added 216,000 net new jobs during March, slightly stronger than the consensus forecast of a 190,000 job gain. Private-sector job gains totaled 230,000 in March, after a revised gain of 240,000 private-sector jobs in February. The two-month rise was the largest in five years.

Job gains in the private sector are especially critical at this time because of ongoing losses in state and local government employment. Severe budget pressures upon states, counties and cities across the nation led to a net loss of another 14,000 jobs in March.

Local governments have shed more than a quarter million jobs during the past 12 months, with more than half of the jobs cut in public schools, according to cnnmoney.com. Local government employment is down by 416,000 positions since peaking in September 2008.

8.8 percent

Perhaps the best news in the employment report was another down-tick in the nation's unemployment (jobless) rate to a two-year low. March's jobless rate of 8.8 percent, down from February's 8.9 percent rate, has now fallen a full 1 percent since November. The decline was the largest four-month drop since 1984, a period of 27 years!

The sharp decline in the nation's unemployment rate, despite less than blockbuster job gains in recent months, again illustrates the difference between the two major employment surveys. The "establishment" survey of roughly 400,000 medium and large-size businesses (the source of the 216,000 net job gain in March) reported an average monthly gain of 159,000 net new jobs during 2011's first quarter.

The "household" survey of roughly 60,000 households (the source of the 8.8 percent jobless rate) reported a gain of 291,000 jobs in March and an average monthly gain of 377,000 jobs during the first quarter — more than twice that found in the establishment survey!

As noted before, the household survey can, at times, be a better measure of what is happening in the new business start-up and current small-business sector than is the establishment survey. Over time, the two surveys do tell similar stories.

It's no secret that the 1 percent decline in the nation's unemployment rate over the past four months has been 1) a surprise to forecasting economists; 2) a delight to a Democratic administration and Senate already focused on the 2012 election cycle; and 3) a bit disappointing from a political perspective for Republicans focused on the same.

As noted ad nauseam, the unemployment rate could still move slightly higher in coming months as potentially hundreds of thousands of people, hearing more stories of job availability, re-enter the labor force in search of the job. Unless and until they find a job, they are now counted as unemployed.

Job detail

The nation's goods-producing sector added 31,000 net new jobs during March, led by another 17,000 jobs in manufacturing. The mining and logging sector added 15,000 jobs, while construction lost another 1,000 jobs.

The nation's much larger private-sector service-providing industries added 199,000 net new jobs in March, the largest monthly gain since May 2010. Professional and business services added a healthy 78,000 net new jobs, while the education and health services sector added 45,000 jobs, with the majority in health care.

Wholesale and retail trade added 32,000 jobs, while financial activities added 6,000 positions. Leisure and hospitality added 37,000 net new jobs, while "other" services added 5,000 jobs, and information lost 4,000 jobs.

Other key data

A total of 13.5 million people are now counted as unemployed, down 1.4 million since March 2010. Of this total, 45 percent have been out of work for six months or longer.

Sixty-eight percent of industries have added jobs this year.

Of the 16 major job classifications within the Bureau of Labor Statistics, 13 have seen their respective unemployment rates decline during the past year.

The "underemployment rate" — that which includes the unemployed, those working part-time who would prefer to work full-time, and those discouraged workers who have left the labor force but would accept a job if one were offered — fell to 15.7 percent in March, a sizable decline from its recent high of 17.4 percent.

Average hourly earnings for all employees on private non-farm payrolls were unchanged at $22.87. The rise of 1.7 percent during the past 12 months has been totally offset by higher inflation

Educational value

It's no surprise that an increasingly sophisticated and competitive U.S. economy seeks those with higher levels of educational attainment. Since January, employment has grown by 521,000 jobs for Americans with a bachelor's degree or higher — and declined by 318,000 for those with only a high school diploma, according to USA TODAY.

What a powerful statistic.

Unemployment for those ages 25 and over with less than a high school diploma was 13.7 percent in March. For those with a high school diploma and no college, the jobless rate was 9.5 percent. For those with some college or an associate's degree, the rate was 7.4 percent in March. For those with a bachelor's degree or higher the rate was 4.4 percent.

Use this data wisely when your kids or grandkids say that education is just not that important. Earnings differentials are also enormous.

From here?

Left largely alone, the U.S. economy could easily continue to build on current momentum and sustain solid job gains over the balance of the year and into 2012. In fact, that is our current view, with the American economy likely to add perhaps 2.5 million net new jobs this year.

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The real world, however, throws many curveballs, with today's list including newly emerged conflicts across the Middle East and in northern Africa, each adding to the highest oil prices in 30 months. Add in renewed anxiety about enormous debt levels across southern Europe, the "what ifs" tied to Japanese nuclear containment, and the "what ifs" tied to budget battles in our nation's capital.

What if government shuts down on Friday of this week? What would be the implications?

What if both sides can't agree on serious long-term deficit reduction as part of extending the debt ceiling (our ability to borrow money), now to be reached in mid-May? What then?

Jeff Thredgold is chief economist for Zions Bank and founder of Thredgold Economic Associates, a professional speaking and economic consulting firm. Visit www.thredgold.com.