In March, the US economy added 303,000 new jobs. Slightly less people were unemployed, at 3.8%, and earnings increased more quickly than inflation. The highest one-month payroll increase since May was reported in the report.
The US economy created 303,000 new jobs in March, exceeding forecasts and demonstrating that the country’s economic development is still stable. The reading is a notable increase from the 270,000 added in February and the 256,000 added in January, and it corresponds with the highest one-month increase in payrolls since May 2023. Experts had predicted that March would see an increase in employment of roughly 200,000.
According to the Bureau of Labour Statistics, during the previous 12 months, salary growth was 4.1% and the unemployment rate decreased somewhat to 3.8%. Hospitals, dining establishments, local governments, big warehouse stores, and specialist trade contractors were the industries with the biggest job growth. Manufacturing did not create any net new employment.
The economy is still shown incredible resilience in the face of high interest rates and concerns about a significant slowdown. The labour force participation rate increased to 62.7% as a result of more people finding and accepting jobs, which is another indication of a robust economy.
The Federal Reserve may decide to keep delaying the interest rate decreases it has been hinting at for this year in response to the compelling data point. This implies that borrowing money for anything from credit cards to cars to homes will probably continue to be expensive for a while. The central bank aims to curb excessive consumption of goods and services, which drives up prices, by maintaining high interest rates.
Traders moved the likelihood of the first rate decrease of 2024 from June to September after the news was released on Friday.
However, some economists are hopeful that the continued jobs boom may not result in greater inflation, given that the pace of hourly pay slowed in March to the slowest annual rate of the post-pandemic period. Although immigration is a contentious political issue, a number of recent surveys indicate that the increase in immigrant labourers has restrained the rate of wage growth that could be contributing to inflation.
Fed Chair Jerome Powell stated earlier this week in a speech that “labour supply increased significantly in 2023, thanks to rising participation among 25-to-54-year-olds, as well as a strong pace of immigration.”
Powell did, however, state that the central bank was not in a haste to begin lowering interest rates. “Considering the strength of the economy and the progress on inflation thus far, we have time to let the incoming data guide our policy decisions,” Powell stated. “We do not expect that it will be appropriate to lower our policy rate until we have greater confidence that inflation is moving sustainably down towards 2 percent.”
The Federal Reserve’s next move will mostly depend on the results of this week’s inflation data, even though the robust payrolls data may postpone an interest rate cut. The data released today should comfort investors that the economy is still robust and earnings will continue to rise even if the Fed decides not to cut in June.
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