Job growth — not discouraged workers giving up on their job searches — pushed unemployment in Ohio down for the eighth straight month in March.

The rate dipped to 7.5 percent last month from 7.6 percent in February, the Ohio Department of Job and Family Services reported Friday. The March rate was the lowest since October 2008 and lower than the national rate of 8.2 percent. A year ago, Ohio’s unemployment rate was 8.8 percent.

The March figure may be the strongest indicator yet this year that state’s job market is strengthening.

The civilian labor force grew by 10,000 to 5.81 million, and total employment was up 15,000 to 5.37 million, according to the state jobs department.

“These numbers are all positive,” said ODJFS spokesman Ben Johnson. “In previous months, the reason that total employment has fallen and the unemployment rate has fallen is that the labor force shrank. But that was not the case last month.”

Discouraged workers who drop out of the labor force are no longer counted as unemployed.

Many private industries added jobs last month, led by the trade, transportation, and utilities sectors, which grew employment by 6,300.

But state and local governments continued to slash payrolls last month by 1,200 workers.

Since the beginning of last year, the government sector has shed more than 5,000 jobs in Ohio, and government austerity is expected to continue to be a drag on the state’s jobs recovery going forward.

A recent research note from Moody’s Analytics notes that state spending with public sector employers is down in every area, except health care. And state aid to municipalities has been cut in half in the past two years, according to the report.

Such fiscal pressures are even more pronounced in Dayton, where general fund revenues are back to 1998 levels, according to Moody’s.

The economics research and consulting firm predicts weaker revenues and lower state aid will force school districts and municipalities to cut even more staff this year. Numerous school districts have announced elimination of positions including Beavercreek, Vandalia, Kettering, Centerville, Dayton and Mad River Local Schools.

“Dayton’s recovery will gain traction in 2013, led by consumer-related industries and business services,’’ said Moody’s economist Zachary Sears. In the meantime, “local government fiscal adjustments will restrain job growth.’’ Sears added that Wright-Patterson Air Force Base — the Dayton area’s largest employer with 27,000 people — will also turn into a “weight on growth over the next two years’’ amid lower defense spending goals. The base announced in March that 452 positions would be cut.

Still, government spending is only one of the headwinds threatening to hold back job growth in the coming months.

High gas prices, a retreating stock market and underwater mortgages threaten to slow economic growth.

Last month, Fed Chairman Ben Bernanke said in a speech that faster economic growth is needed to maintain job market momentum.

Overall, the U.S. labor market added fewer jobs than economists had expected last month, a sign that employment gains across the country could already be slowing.

The Bureau of Labor Statistics said the economy added 120,000 jobs in March, compared to the more than 200,000 that many analysts had predicted.

Contact this reporter at (937) 225-2437 or rtucker@DaytonDailyNews.com.