According to the latest jobs report, the U.S. economy reported strong new employment numbers for March, but failed to meet lofty expectations from the market. American employers added 431,000 new positions in the past month, slightly under the 490,000 projected new positions expected from Dow Jones economists. The unemployment rate also dipped to 3.6 percent, the Bureau of Labor Statistics reported Friday.
At a glance
- The U.S. jobs report illustrates continued economic recovery from the mass layoffs during the COVID-19 pandemic
- The Federal Reserve will likely raise rates multiple points this year alone, which could stall future job numbers
- Leisure and hospitality led the way with over 100,000 new jobs added to the economy
In a sign of healthy economic COVID-19 recovery, the labor force participation rate increased one-tenth of a percentage point to 62.4 percent; or within one point of its pre-pandemic level back in February 2020. The labor force grew by 418,000 workers and is now within 174,000 of the pre-pandemic state.
Despite a myriad of limiting factors, like a spike in inflation, a damaged supply chain, COVID-19 regulations, and now a war in Europe, employers have remarkably added at least 400,000 jobs for 11 straight months.
“All in all, nothing shocking about this report. There was nothing that was really surprising,” said Simona Mocuta, chief economist at State Street Global Advisors. “Even if this report came in at zero, I would still say this is a very healthy labor market.”
Though new opportunities always signal a healthier economy, the report actually reflects a glut of jobs available
The March report also painted a bright picture of rising employee hourly wages of around 5.6 percent; though those wage increases did not keep up with inflationary pricing well over 7 percent in Q1. Economists across the country will be watching the labor market closely as the Federal Reserve plans to raise interest rates in the coming months.
Market makers are anticipating rate increases at each of the six remaining Fed meetings this year. They expect a half percentage-point move in May; and then four more to total 2.5 percentage points before 2022 ends.
The raised rates will likely help clamp down on inflation but will make money more expensive for private businesses. As such, a significant slowdown in hiring could occur; especially if any external factors trigger a panicked slowdown in consumer spending for any reason.
As has become expected through much of the pandemic, the leisure and hospitality industries the report with gains of 112,000 jobs. Professional and business services contributed 102,000 to the total; retail was up 49,000; and manufacturing added 38,000. Other sectors reporting gains included social assistance (25,000), construction (19,000), and financial activities (16,000).
Vincent Reinhart, chief economist at Dreyfus and Mellon, said the numbers show that “the U.S. economy continues to have underlying momentum and that firms are taking workers when they can.”
Karen Fichuk, CEO of the staffing company Randstad North America, said that the economy now boasts 1.7 job openings for every person seeking unemployment.
“Even if you get all the unemployed workers back, it still leaves a gap,’’ she said. “We need to attract people back into the workforce.”