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The District’s jobless rate creeped down one tenth of one percent last month, lowering the local unemployment rate to 8.5 percent, according to figures released today by the federal Bureau of Labor Statistics. Overall, the District added 2,900 jobs in March, continuing a gradual downward trend after peaking at 12 percent in 2012.

Of the jobs added last month, 2,500 were in the private sector, with the remaining coming in government positions just as the federal government prepared to enter a period of austerity with forced budget cuts that will result in many government workers being forced to take unpaid leave. Still, it puts the local workforce in a brighter spot than March 2012, when the unemployment rate was 9.2 percent.

“The District’s economy is continuing our recovery from the effects of the recession, and continued strong growth in our private sector is driving our drop in unemployment,” Mayor Vince Gray said in a news release. “Nonetheless, I continue to be concerned about the negative effects of sequestration and the drag on our overall economic growth created by the uncertainty surrounding the federal budget and federal jobs.”

The District still lags nearly a full point behind the national unemployment rate of 7.7 percent. Last month’s national job numbers showed anemic growth, with just 88,000 jobs added throughout the entire United States.

Ed Lazere, the executive director of the D.C. Fiscal Policy Institute, says that today’s unemployment report suggests that the city will be able to sustain the eventual effects of sequestration. “With the possibility that federal budget cuts could hurt the D.C. economy before long, it is good news that unemployment has been falling in recent months,” he writes in an email.

But Lazere warns that despite the optimism prompted by falling overall jobless numbers, the benefits are not distributed evenly throughout the District. “For those without a post-secondary degree, unemployment still has not come down much from the recession,” he writes. While the Fiscal Policy Institute is still looking at data from the most recent months, the organization’s analysis through the end of 2012 showed that low-income workers faced an unemployment rate of 16 percent, while workers with less than a high-school diploma had a 19 percent jobless rate.