Published: Apr 19, 2011 5:47 PM EDT
Updated: Apr 19, 2011 2:47 PM EDT

WASHINGTON- The unemployment rate fell in two-thirds of the nation's states last month, the latest evidence that the strengthening economy is encouraging many employers to boost hiring.

The Labor Department said Tuesday that the unemployment rate dropped in 34 states in March. That's the largest number of states to record a decline since June. The rate rose in seven states and was unchanged in nine and Washington, D.C.

Employers hired more workers in 38 states. A government survey of employer payrolls found only 12 states plus Washington, D.C. lost jobs last month, the fewest since October.

Nationally, the unemployment rate fell in March to a two-year low of 8.8 percent, and private employers added more than 200,000 jobs for the second consecutive month. That's the largest two-month hiring total in four years.

New Mexico reported the biggest monthly drop in unemployment among all states, falling from 8.7 percent in February to 8.1 percent in March. Florida, Oklahoma, Indiana, Missouri and Ohio posted the next biggest monthly declines.

Texas added 37,200 net jobs in March, the most of any state. It was followed by Missouri and Florida, both of which reported strong gains. California lost 11,600 net jobs - the most of any state. Connecticut, Louisiana, Maryland and Maine all had large job losses, too.

Nevada again had the highest unemployment rate of any state, although it fell from 13.6 percent to 13.2 percent in March. California, at 12 percent, was second, followed by Florida (11.1 percent) and Rhode Island (11 percent).

North Dakota had the nation's lowest unemployment rate at 3.6 percent. It was followed by Nebraska at 4.2 percent and South Dakota at 4.9 percent.

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