April 1, 2011— -- The U.S. unemployment rate dipped slightly to a two-year low of 8.8 percent with the addition of 216,000 new jobs last month, according to Labor Department statistics released this morning.
"There is no question the labor market has been picking up speed over the last few months," Leo Abruzzese, director of global forecasting at Economist Intelligence Unit, said Thursday before release of the March report.
The February data had been an encouraging sign that labor markets were moving toward recovery, Abruzzese said.
While rising gas and food costs could affect the job market, Abruzzese said he doubts that such headwinds "will dramatically slow down the economy or knock the economy off track."
But President Barack Obama's former economic adviser, Christina Romer, said policy makers haven't been aggressive enough about solving the debilitating unemployment that has plagued the economy.
"I frankly don't understand why policy makers aren't more worried about the suffering of real families," Romer said during a discussion at Vanderbilt University in Nashville Tuesday, according to Politico. "I think there are tools we have that we can use, and I think it's shameful that we're not using them."
Despite February's dip in the unemployment rate to 8.9 percent, Romer, an economics professor at the University of California at Berkeley, called the figure "an absolute crisis."
The private payroll firm Automatic Data Processing Wednesday reported an increase of nearly 201,000 jobs for the month of March.
But the pain of the Great Recession continues. The long-term unemployed have seen more and more ads popping up rejecting candidates that have been laid off. Such challenges even sparked a hearing by the equal Employment Opportunity Commission in February.
"We need to realize that there is still a lot of devastation out there," Romer said.
"If I have a complaint about policy these days, it's that we're not doing enough," Romer said. "That goes all the way up to the Federal Reserve, [which] could be taking more aggressive action. It goes to the Congress and the administration; there are fiscal policy actions they could be taking.
"And don't tell me you can't [take those actions] because of the deficit because I think there are fiscally responsible ways," she said.
But some economists say a stimulus or additional debt could be counterproductive.
"[Romer] is right that unemployment is really high and masks really what the situation is, because a lot of people have been out of work so long they're not picked up as discouraged workers or the unemployed," said Steve Bronars, a senior economist at Welch Consulting. "But I don't think there's a policy or fiscal stimulus that's going to be the silver bullet and get us out of this mess."
Have Policy Makers Done Enough?
Economists warn that the government's stepping in or lobbying for another stimulus could have an ill effect on investor confidence domestically and internationally.
We "can't become so desperate that investors lose confidence in the U.S.," Abruzzese of the Economist Intelligence Unit said. "Things are getting better, they're not getting worse. They're not great but we're doing much better than six months ago."
The the U.S. jobless rate held steady late last year at 9.6 percent, marking the longest stretch of unemployment levels above 9 percent since the Great Depression.
According to Politico, Romer suggested "that extending the payroll tax break to the employer side of the payroll tax could spur the economy; she suggested that Congress simultaneously pass a comprehensive, long-term plan for reducing the deficit."
Economist Bronars said, "If there was a simple solution, I think both sides could get together -- Democrats and Republicans" -- and solve the problem.
"It's not an us-against-them. ... It's a bit more complicated than she [Romer] makes it out to be."