Current:Home > reviewsToday's jobs report shows economy added booming 303K jobs in March, unemployment at 3.8% -Prime Capital Blueprint
Today's jobs report shows economy added booming 303K jobs in March, unemployment at 3.8%
View
Date:2025-04-27 23:53:00
Can anything slow down the U.S. labor market?
Hiring accelerated in March as employers added a booming 303,000 jobs despite high interest rates, stubborn inflation and growing household financial stress.
The unemployment rate fell from 3.9% to 3.8%, the Labor Department said Friday.
Economists surveyed by Bloomberg had estimated that 213,000 jobs were added last month.
Payroll gains for January and February were revised up by a total 22,000, portraying an even more robust picture of job growth early this year. January's were bumped up from 229,000 to 256,000 while February's were downgraded modestly, from 275,000 to 270,000.
The blockbuster report bolsters the view that the economy is on track for a "soft landing," a scenario in which the Federal Reserve wrestles down inflation without triggering a recession. But the resilient labor market could prompt the Fed to push interest rate cuts to later in the year to ensure inflation is subdued before acting, economists say.
Are wages going up faster than inflation?
Average hourly pay rose 12 cents to $34.69, pushing down the yearly increase from 4.3% to 4.1%.
Since hitting a high of 5.9% in March 2022, average wage growth has slowed as labor shortages have eased, but it’s still above the 3.5% pace Federal Reserve officials say would align with their 2% inflation goal.
Many Americans, meanwhile, are benefitting because typical pay increases have topped inflation the past year, giving them more purchasing power.
What will interest rates do in 2024?
Fed Chair Jerome Powell has said recently that officials are no longer worried that strong job growth will overheat the economy and reignite a sharp run-up in prices. It’s more significant that pay increases, which could fuel inflation, continued to moderate last month.
Still, the sizzling report may assure Fed officials that the economy is at little risk of weakening significantly or slipping into recession, delaying the first rate cut past the June timeframe that markets are anticipating.
“The blockbuster 303,000 nonfarm payrolls in March supports the Fed’s position that the resilience of the economy means it can take its time with rate cuts, which might now not begin until the second half of this year,” economist Paul Ashworth of Capital Economics wrote in a note to clients.
Since March 2022, the Fed has hiked its key short-term interest rate from near zero to a 23 year-high of 5.25% to 5.5%, but it's held it steady since last July as inflation has eased. Officials have forecast three rate cuts this year, goosing the stock market, but that timetable could shift if inflation softens more gradually or the economy and job market stay hot.
The Fed’s preferred inflation measure ticked up to 2.5% in February, leaving it above its 2% goal but well below the four-decade high of 7% it hit in mid-2022.
What is the stock market doing today?
Investors appeared to warm to the combination of big job gains and moderating wage growth that could keep the Fed's rough forecast of three rate cuts this year intact. In early trading, the Dow Jones industrial average rose 82 points to 38,679 and the S&P 500 index climbed 0.54% to 5,174.
Which sectors added the most jobs?
Last month, health care and social assistance led the job gains with 81,000. The public sector, mostly local governments, added 71,000; construction, 39,000; and leisure and hospitality, which includes restaurants and bars, 49,000.
Ashworth said the payroll gains “still look a little lopsided,” with government, health care and leisure and hospitality doing the heavy lifting. Those sectors also drove job growth late last year, sparking forecasts of a labor market that would downshift dramatically in coming months.
In March, job creation in leisure and hospitality and construction could have been spurred by relatively mild weather, That could mean less hiring in those industries in the months ahead. And professional and business services added just 7,000 job last month and manufacturing payrolls were flat.
What is the labor force participation rate?
In March, the labor force − which includes people working and job hunting – swelled by 469,000, boosting the share of all adults in that group from 62.5% to 62.7%, just under the post-pandemic high but well below the pre-COVID’s 63.3%.
A bigger labor supply helps contain wage growth, assuring the Fed that job growth can stay strong without triggering inflation.
Is the job market still strong?
Job growth has slowed gradually after a post-pandemic hiring burst in 2021 and 2022 but not nearly as much as anticipated, with employers adding well over 200,000 positions a month over the winter. Economists pointed to unseasonably warm weather in December and low layoff totals in January after fewer holiday workers were brought on in the fall.
Also, net job gains have been bolstered by employers’ reluctance to let workers go after grappling with two years of COVID-related worker shortages. Hires, though, have dropped below pre-pandemic levels amid high borrowing costs and uncertainty about the economy's course in a presidential election year.
As a result, some forecasters expect the forces that have propped up payroll growth will fade, resulting in fewer than 100,000 job gains a month by mid-year.
The delayed effects of the Federal Reserve’s aggressive interest rate hikes to fight inflation are likely to dampen business spending and hiring. Americans’ COVID-related savings largely have been depleted. And low- and middle-income households are feeling the strains of record credit card debt.
But Goldman Sachs believes a huge influx of immigrants will continue to boost the labor supply and juice hiring this year, noting the number of job openings is still well above the pre-crisis mark. Last month, immigration could have lifted job growth by as much as 50,000 to 290,000, Goldman said.
veryGood! (62)
Related
- Senate begins final push to expand Social Security benefits for millions of people
- Versailles Palace evacuated again for security alert amid high vigilance in France against attacks
- PG&E’s plan to bury power lines and prevent wildfires faces opposition because of high rates
- Candidates wrangle over abortion policy in Kentucky gubernatorial debate
- Behind on your annual reading goal? Books under 200 pages to read before 2024 ends
- Suzanne Somers dies at 76: 'Three's Company' co-star Joyce DeWitt, husband Alan Hamel mourn actress
- EU leaders seek harmony at a virtual summit after cacophony over response to the Israel-Hamas war
- Tennessee court to decide if school shooting families can keep police records from public release
- California DMV apologizes for license plate that some say mocks Oct. 7 attack on Israel
- Here are the Top 10 most popular Halloween candies, according to Instacart
Ranking
- Small twin
- Wisconsin Senate poised to give final approval to bill banning gender-affirming surgery
- India’s Supreme Court refuses to legalize same-sex marriage, says it is up to Parliament
- Medicare Advantage keeps growing. Tiny, rural hospitals say that's a huge problem
- US wholesale inflation accelerated in November in sign that some price pressures remain elevated
- Math disabilities hold many students back. Schools often don’t screen for them
- Horror as Israeli authorities show footage of Hamas atrocities: Reporter's Notebook
- IOC president Thomas Bach has done enough damage. Don't give him time to do more.
Recommendation
The Super Bowl could end in a 'three
'An entrepreneurial dream': Former 1930s Colorado ski resort lists for $7 million
Waiting for news, families of Israeli hostages in Gaza tell stories of their loved ones
Gen. David Petraeus: Hamas' attack on Israel was far worse than 9/11
Where will Elmo go? HBO moves away from 'Sesame Street'
Ex-Mississippi police officer pleads guilty in COVID-19 aid scheme, US Attorney says
How Will and Jada Pinkett Smith's Daughter Willow Reacted to Bombshell Book Revelations
Ja'Marr Chase Always Open merch available on 7-Eleven website; pendant is sold out