Another month, another surge of strong employment gains. Employers added a seasonally adjusted 303,000 jobs in March, the Labor Department reported Friday.
It was the 39th consecutive month of job growth and a much larger gain than forecast. The unemployment rate fell to 3.8 percent from 3.9 percent in February.
The continued strength could boost investor and Federal Reserve confidence that the U.S. economy has reached a healthy balance in which steady increases in business activity, growing employment and rising wages coexist, according to labor market analysts.
That’s a notable change from last year, when leading financial analysts largely believed a recession was just months away.
From late 2021 to early 2023, inflation outpaced wage growth, but that too now appears to have changed significantly, even as wage increases moderate from their peak growth rates in 2022. The average hourly wage of workers increased by 0.3 percent in March compared to the previous month and increased by 4.1 percent compared to March 2023.
Revisions to employment data in recent months showed an overall increase of 22,000 jobs.
Some analysts were concerned about a trend in one of the two surveys the government uses to monitor the labor market: It didn’t match most other data on job growth and layoffs and showed weak hiring rates that, if accurate, would likely have been due to this indicated an economy “already in recession,” according to Bank of America’s economic research team.
But even this troubling portion of outlier data has improved in the latest report.
“The tiny few areas that criticize this labor market are melting away,” said Andrew Flowers, labor economist at Appcast, a staffing company.
Some fear that as the booming labor market recovery transitions to a slower expansion, job growth would be limited mostly to less cyclical sectors such as government staffing and health care. Advances in health care — including hospitals, nursing and care facilities, and outpatient services — led the way in this report, but job growth remains broad-based for now.
The private sector created a total of 232,000 jobs. Construction added 39,000 jobs in March, about double the average monthly gain last year. Hospitality and leisure employment, which collapsed during the pandemic, continues to recover and is now above February 2020 levels.
The “sustained strength,” said Joe Davis, chief global economist at Vanguard, comes from “household balance sheets supported by pandemic-related fiscal policy and a virtuous circle in which job growth, wages and consumption drive each other.”
Data analysts note that better-than-expected increases in business productivity and labor force participation also provided additional impetus. Businesses large and small have had to overcome an obstacle this decade: a pandemic, inflationary pressures and a sharp increase in borrowing costs. But recently released data from the Bureau of Economic Analysis shows corporate profits have reached a record high.
Officials at the Fed, which quickly raised interest rates in 2022 and early 2023 to combat inflation, have expressed cautious optimism that they are moving closer to their goals of low unemployment and more stable prices.
According to the Fed’s preferred measure, inflation has fallen sharply from its peak of 7.1 percent. But in February it rose to 2.5 percent, still half a percentage point shy of the Fed’s target. And some fear that rising oil prices or geopolitical chaos could upend the delicate situation.
Sal Gilbertie, chief executive of Teucrium Trading, which covers commodities markets, said he believes oil energy prices “could be a little higher if Ukraine continues to put pressure on Russia and economic numbers remain healthy.”
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2024-04-05 15:46:45
www.nytimes.com
