Job creation in March handily topped expectations, a sign that a busy and resilient labor market continues to accelerate.
The U.S. Department of Labor’s Bureau of Labor Statistics reported on Friday that nonfarm payroll employment increased by 303,000 this month, much higher than the 200,000 increase expected by Dow Jones and higher than February’s downwardly revised increase of 270,000.
Although the labor force participation rate rose to 62.7%, up 0.2 percentage points from February, the unemployment rate fell slightly to 3.8%, in line with expectations. A broader measure that includes discouraged workers and those working part-time for financial reasons was steady at 7.3%.
In a key measure of average hourly earnings, wages rose 0.3% for the month and 4.1% from the same period last year, both in line with Wall Street expectations.
The job growth came from many common industries that have driven job growth in recent months. Healthcare leads the way with 72,000 people, followed by government (71,000), leisure and hospitality (49,000) and construction (39,000). Retail trade contributed 18,000, while the “other services” category increased by 16,000.
“This is another very strong report,” said Lauren Goodwin, economist and chief market strategist at New York Life Investments. “This report and the February report showed an expansion in job creation, That’s a very good sign.”
Although the overall unemployment rate fell, the black unemployment rate surged to 6.4%, an increase of 0.8 percentage points, reaching the highest level since August 2022. The Asian and Hispanic unemployment rates both dropped significantly to 2.5% and 4.5%.
Markets have been keeping a close eye on the jobs data, especially as the Federal Reserve weighs the next steps for monetary policy. Stocks fell this week on worries that a strong labor market and a resilient economy could keep central banks on hold for longer than expected.
Stock futures rose after the report, as did U.S. Treasury yields.
The Fed hopes to bring inflation back to 2% annually, but that goal has proven elusive even as price increases have slowed from a peak in mid-2022. Most indicators point to inflation above 3%, but the Fed’s preferred indicator is below that level.
Markets are pricing in a first rate cut in June, although several Fed officials, including Chairman Jerome Powell, said this week they preferred a cautious, data-reliant approach. The U.S. Bureau of Labor Statistics will release the March consumer price index on Wednesday.
While a series of positive developments have kept the unemployment rate below 4% since January 2022, there are some signs of cracks. For example, household employment levels have grown only slightly over the past year, while casual employment has fallen sharply.
However, the household survey used to calculate the unemployment rate showed a stronger increase in March, with an increase of 498,000 people, exceeding the 469,000 increase in the civilian labor force.
This is breaking news. Please check back for updates.
About The Author
