 In March, the US economy added more jobs than anticipated and the unemployment rate decreased slightly, indicating that the labor market is still more robust than many economists had anticipated.
Labor Statistics Released
The labor market added 303,000 nonfarm payroll jobs in March, according to data from the Bureau of Labor Statistics released on Friday.
This figure was much more than the 214,000 economists had predicted. In the meantime, the jobless rate dropped from 3.9% in February to 3.8%.
In the meantime, salaries, which are regarded as a key indicator of inflationary pressures, grew by 4.1% annually, the least amount since June 2021.
Wages rose by 0.3% on a monthly basis, which was more than the 0.2% growth in the previous month.
The data is released as investors await indications of a slowdown in the job market and hope that the economy will continue to grow in order to justify Federal Reserve Chair Jerome Powell’s current base case of three rate reduction later this year.
Powell described the labor market as “strong but rebalancing” on Thursday at a speech at Stanford University, following two months of robust job increases.
While the Fed maintains restrictive interest rates to combat inflation, a robust labor market has been seen as essential to the economy’s ability to avoid recession.
Kathy Bostjancic, chief economist at Nationwide, wrote in a note to clients that “the strong and broad-based pace of job creation in March topped all estimates and underscores the Fed will be in no hurry to start cutting interest rates.”
But as Chairman Powell has said, since the strong rise in employment also represents an expansion in the labor supply, an easing of monetary policy will not be prevented.”
Biggest Job Growth
In support of Bostjancic’s assertion, the average weekly hours worked increased slightly from 34.3 to 34.4, and the labor force participation rate increased to 62.7% from 62.5% previously.
According to Friday’s data, the healthcare industry saw the biggest job growth, adding 72,000 positions in March.
Government employment increased by 71,000 positions in the meantime. Over the past 12 months, the construction industry has doubled its average monthly growth, adding 39,000 jobs.
In general, more data released this week has shown that the labor market is still strong. The most recent Job Openings and Labor Turnover Survey (JOLTS), which was made public on Tuesday, indicated that hiring and job openings increased little in February.
ADP’s most recent data on private employment, however, revealed that 185,000 new private positions were created in Marchâmore than the 155,000 that were generated in February.
In a note to clients, Capital Economics chief North America economist Paul Ashworth stated, “The Fed’s stance that it can take its time with rate cuts, which might now not begin until the second half of this year, is supported by the blockbuster 303,000 increase in non-farm payrolls in March.”
