The unemployment rate in Ohio dropped to 6.1 percent, the lowest since April 2008, from 6.5 percent in February, today's report showed. Missouri and New Mexico were among states with the biggest increases in joblessness last month.

Although unemployment declined in Rhode Island, the state continued to have the highest rate in the country at 8.7 percent. Nevada was second, with a rate of 8.5 percent, followed by Illinois at 8.4 percent.

North Dakota

North Dakota had the lowest unemployment in the nation, holding at 2.6 percent, where it's been since January.

State and local employment data are derived independently from the national statistics, which are typically released on the first Friday of every month. The state figures are subject to larger sampling errors because they come from smaller surveys, thus making the national figures more reliable, according to the government's Bureau of Labor Statistics.

In today's report, states showing declines in payrolls included Pennsylvania and Virginia.

"Labor market conditions were mixed but generally positive," according to the Fed's Beige Book, based on reports gathered before April 7. "The New York, Cleveland, Richmond, Chicago, Kansas City, and Dallas Districts reported difficulty finding skilled workers."

The break-out for state jobs released today followed Labor Department data on April 4 that showed nationwide payrolls climbed 192,000 in March after a 197,000 gain in February that was larger than first estimated. The U.S. unemployment rate held at 6.7 percent. Private employment, which excludes government jobs, surpassed the pre-recession peak for the first time.

Yellen's View

Janet Yellen, in her first major speech on her policy framework as Fed chair, emphasized her commitment to support the recovery and told investors to pay attention to shortfalls in both inflation and the jobless rate for signals on the central bank's decisions on the policy rate.

"Thus far in the recovery and to this day, there is little question that the economy has remained far from maximum employment," she said.

At 6.7 percent for March, Yellen said the unemployment rate was more than a percentage point higher than policy makers' estimate for full employment of 5.2 to 5.6 percent, and it will take more than two years to close the gap.

Progress in cities remains uneven, with tight labor markets in some metro areas driving up wages. Forty-nine, or 13 percent, of the 372 metro areas reported jobless rates below 5 percent in February, the most for that month since 2008, two months after the start of the recession, Labor Department figures showed previously.

Tightening Markets

Unemployment in Austin-Round Rock-San Marcos was 4.8 percent in February. The lowest was 2.8 percent in Houma-Bayou Cane-Thibodaux, Louisiana, because of offshore-oil exploration in the Gulf of Mexico. Four years ago, during the worst of the labor-market slump, just two cities had jobless rates below 5 percent.

At the same time, 29 metro areas still have unemployment rates of at least the nation's October 2009 post-recession peak of 10 percent, including Atlantic City, New Jersey, and Fresno, California.