Unemployment Dips to 8.9%

More good news in February: The unemployment rate dipped to 8.9%—a nearly two-year low—as employers hired at the fastest pace in nearly a year. The economy tacked on 192,000 jobs last month, with factories, professional and business services, education, and health care among those expanding employment. The unemployment rate has been falling for three months, down from 9.8% in November.

Economists expected a strong February report, since fewer people sought unemployment benefits last week than in any week in nearly three years. The sharp decline in applications for unemployment benefits, along with positive reports yesterday from retailers and the service industry, are the latest evidence that hiring will pick up this year. "All signs point to much stronger hiring," says one economist. "I think we finally have a prescription for a better job market."