Unemployment fell to its lowest point in almost four years due to two consecutive months of robust job growth, which was dispersed broadly across the Iowa economy. The state's labor force also declined by 6,800 in March, which was another factor in alleviating unemployment.

We are at the bottom of European economic growth, ... Schroeder had four years to fight unemployment and did nothing.

Despite low unemployment, wage growth remains contained. With job gains slowing, the risks from wage inflation appear to be receding. Interest rates will remain on hold in 2006.

Stockton continues to exhibit job growth well in excess of the state average, and unemployment is 1.3 percent lower than a year ago. Construction still leads all sectors in creation of new employment opportunities, despite signs of a return to normalcy in the housing sector.

Overall, while it is clear that the pace of jobs growth is moderating, we continue to believe that the unemployment rate will hold broadly steady around five per cent amid trend-like growth in the economy and employment.

Movements in the unemployment rate will tell Fed officials whether growth is absorbing unused capacity.