Job creation in March easily exceeded expectations, signaling a vibrant and resilient labor market that continues to accelerate.
Nonfarm payrolls rose 303,000 for the month, the Labor Department's Bureau of Labor Statistics said Friday, well above the Dow Jones forecast for a 200,000-job gain and a downwardly revised 270,000 increase in February. It also exceeded.
The unemployment rate fell slightly to 3.8%, as expected, even though the labor force participation rate increased by 0.2 points from February to 62.7%. The broader measure, which includes disengaged workers and those in part-time jobs for financial reasons, was flat at 7.3%.
A key measure of average hourly wages showed wages rose 0.3% in the month and 4.1% year over year, both in line with Wall Street expectations.
The job growth came from many of the usual sectors that have boosted profits in recent months. Health care led him with 72,000, followed by government (71,000), leisure and hospitality (49,000) and construction (39,000). Retail businesses increased by 18,000 jobs and the “Other Services” category increased by 16,000 jobs.
“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 show some breadth in terms of job creation, which is a very good sign,” he said.
Despite broad-based unemployment declines, the black unemployment rate rose 0.8 percentage points to 6.4%, tying its highest level since August 2022. Unemployment rates for Asians and Hispanics plummeted to 2.5% and 4.5%, respectively. .
Markets are keeping a close eye on employment data, especially as the Fed considers its next move on monetary policy. Stocks fell this week on concerns that a strong labor market and resilient economy could mean the central bank's policy suspension lasts longer than expected.
Stock market futures rose on the news, and U.S. Treasury yields also accelerated their rise.
The Fed aims to bring inflation back to 2% annually, a goal that is proving difficult to achieve even as price increases have slowed from their peak in mid-2022. Most indicators have inflation above 3%, but the Fed's recommended indicators are below that level.
Market sentiment suggests a first rate cut in June, but several Fed officials, including Chairman Jerome Powell, signaled this week that they prefer to take a cautious, data-driven approach. The BLS will release the Consumer Price Index for March on Wednesday.
Despite a string of positive growth that has kept the unemployment rate below 4% since January 2022, there are some signs of cracks. For example, over the past year, the level of household employment has increased only slightly, while temporary employment has declined sharply.
However, the Household Survey, which is used to calculate the unemployment rate, recorded an even stronger increase in March, increasing by 498,000 people, more than absorbing the 469,000 increase in the civilian labor force level.
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