US employers added a solid 236,000 jobs in March, suggesting the economy remains on solid footing despite the nine interest rate hikes the Federal Reserve has imposed over the past year in its drive to tame inflation.
The unemployment rate fell to 3.5 percent, just above the 53-year low of 3.4 percent set in January.
At the same time, some details in Friday’s report from the Labor Department raised the possibility that inflationary pressures may be easing and the Fed may decide to hold off on its rate hikes soon. Average hourly wages stood at 4.2 percent 12 months ago, down sharply from the 4.6 percent year-over-year increase in February.
Measured month by month, wages increased 0.3 percent from February to March, one tick from the modest 0.2 percent increase from January to February. But even that figure indicated a slowdown in average wage growth in the final months of 2022.
Last month’s job growth was less than the 326,000 added in February.
“Today’s report is a Goldilocks report,” said Daniel Zhao, principal economist at Glassdoor. “It’s hard to find a way that could have been better. We see that the job market is cooling, but it’s still resilient.”
In another sign that may reassure the Fed’s inflation fighters, 480,000 Americans started looking for work in March. Generally, the larger the supply of job seekers, the less pressure employers feel to raise salaries. The result could be a reduction in inflationary pressures.
The percentage of people who either have a job or are looking for a job – the so-called labor force participation rate – reached 62.6 percent in March, the highest level in three years. And the share of working-age Americans — those ages 25 to 54 — who have jobs rose to 80.7 percent, the highest point since 2001.
“Americans, by and large, are looking for work and finding it,” Zhao said.
In its report on Friday, the government revised down its estimate of job growth by 17,000 in January and February combined.
“The labor market continues to soften,” said Sinam Buber, an economist at job firm ZipRecruiter.
Job growth last month was led by the leisure and hospitality category, which added 72,000. 50,000 in profit in that area’s industries, restaurants and bars.
State and local governments added 39,000, healthcare companies added 34,000. But construction companies cut 9,000 jobs, the sector’s first such decline since January 2022. And factories slightly reduced payrolls for the second straight month, reflecting a slowdown in US manufacturing.
Although unemployment remains higher for people of color than for white Americans, the unemployment rate for black workers fell to 5 percent last month — the lowest unemployment rate for African Americans in government records dating back to 1972.
Job growth is still brisk in the economy, with many employers still struggling to fill positions.
In North Carolina’s Outer Banks, Clark Tweedy said his family company, which sells properties and helps homeowners find vacation rentals, still faces what he calls “the tightest time of one’s lifetime.” job market”.
Tweedy & Company has sharply increased entry-level wages for seasonal workers — it hires 500 to 600 per year in 2019 for $13-$14 to $18-$20 an hour.
Tweedy said service companies like his have to treat employees with the same respect as customers, knowing that the best people have ample job opportunities elsewhere.
“There’s no algorithm that cleans the bathroom or the kitchen,” he said. “We have to pay more. We have to train more. We have to engage more.”
For its 175 full-time employees, Tweedy offers perks—from allowing flexible work-at-home schedules to taking employees on group trips to Nashville and Las Vegas.
His business is still booming, thanks to the demand from Americans to take vacations. Despite his high costs, he said, “I’m making more money doing what I do.”
Faced with a labor shortage for more than two years, some companies have turned to machines to improve efficiency. For example, Walmart, the nation’s largest retailer and private employer, has made a big push toward automation.
By fiscal year 2026, the company says it expects two-thirds of its stores to be served by automation, with the majority of items processed through its warehouses to be moved through automated facilities. Changes will include robotic forklifts that unload goods from trailers instead of workers doing manual work. Walmart said such moves would require roles that demanded less manual labor but could provide higher pay.
Despite last month’s healthy job growth, the latest economic signals suggest the economy is slowing, which should help cool inflationary pressures. Manufacturing is slowing down. America’s trade with the rest of the world is declining. And although restaurants, retailers and other service companies are still growing, they are doing so more slowly.
For Fed officials, the first task is to contain inflation. They were slow to react after prices spiked in the spring of 2021, concluding that it was only a temporary result of supply constraints caused by the economy’s surprisingly explosive rebound from the pandemic downturn.
Only in March 2022 did the Fed start raising its benchmark rate from near zero. However, over the past year, it has raised rates more aggressively to attack its worst inflation battle since the 1980s.
And as the cost of borrowing has risen, inflation has come down steadily. The latest year-over-year consumer inflation rate — 6 percent — is down from the 9.1 percent rate last June. But it’s still well above the Fed’s 2 percent target.
The Labor Department said Thursday that it has adjusted the way it calculates how many Americans are filing for unemployment benefits. The tweak added nearly 100,000 jobless claims to its figures for the past two weeks, and that may explain why this year’s massive layoffs in the tech industry haven’t yet appeared on the unemployment rolls. The Fed has expressed hope that employers will ease wage pressure by advertising fewer vacancies rather than cutting many existing jobs.
The March data is the last jobs report the Fed will see before its next meeting on May 2-3. But its policymakers will get a clearer view of inflationary pressures next week when the Labor Department releases reports on prices at the consumer and wholesale levels.
Some economists are holding out hope that the economy can avoid a recession, despite higher lending rates being engineered by the Fed.
“Today’s job market is not going to be bearish,” Zhao said. “I would not bet against the job market.”
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)