The U.S. economy added more jobs than expected in March and the unemployment rate trended downward, highlighting signs that the labor market remains stronger than many economists expected.
Nonfarm payrolls in the labor market rose by 303,000 jobs in March, well above the 214,000 expected by economists, according to Bureau of Labor Statistics data released Friday. Meanwhile, the unemployment rate fell to 3.8% from 3.9% in February.
Meanwhile, wages, an important indicator of inflationary pressures, increased by 4.1% year-on-year, the lowest annual growth rate since June 2021.
The report comes as investors watch closely for signs of a cooling labor market. There is collective strength to support Federal Reserve Chairman Jerome Powell’s current basic scenario of three interest rate cuts this year. After two months of strong employment gains, Powell said in a speech at Stanford University on Thursday that the labor market is “steady but returning to balance.”
While the Fed keeps interest rates capped to combat inflation, a healthy job market is seen as the key to avoiding recession.
Elsewhere in the report, the labor force participation rate rose to 62.7% from 62.5% previously, and average weekly working hours increased from 34.3 to 34.4 hours.
The largest job increase in Friday’s report was in health care, which added 72,000 jobs in March. Meanwhile, government employment increased by 71,000 people. The construction industry added 39,000 jobs to him, with an average monthly increase of twice his over the past 12 months.
Other data released this week generally reflects a still resilient labor market. Both job openings and hiring rose slightly in February, according to the latest Job Openings and Labor Turnover Survey (JOLTS) released Tuesday. Meanwhile, private sector employment rose by 185,000 jobs in March, up from 155,000 in February, according to ADP’s latest private employment data.
“February’s Job Openings and Turnover report is consistent with the labor market remaining very healthy,” Nancy Vanden Houten, chief U.S. economist at Oxford Economics, said in a note to clients on Tuesday. Ta.
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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