Job creation in March was found to far exceed expectations in a sign of continued confirmation of a resilient labor market.
The number of nonfarm jobs increased by 303,000 for the month, far exceeding the Dow Jones forecast for an increase of 200,000 and higher than the 270,000 increase that had been assessed downwards in February, the Labor Department's Bureau of Labor Statistics reported Friday.
The unemployment rate decreased slightly to 3.8%, as expected, with the labor market participation rate increasing to 62.7%, an increase of 0.2 percentage points from February. In a key measure of average hourly earnings, wages increased 0.3% for the month and 4.1% from a year ago, both in line with Wall Street estimates.
The higher job growth is from the regular sector which has driven growth in recent months. The health care sector led the growth with 72,000, followed by government (71,000), hotels and hospitality (49,000), and coaching (39,000). Retail trade contributed 18,000 while the “other services” category added 16,000.
According to Lauren Goodwin, economist and principal market strategist at New York Life Investments, “this report and the February report show a slight increase in job creation, which is a very good sign.”
Markets are watching the jobs data closely especially as the Federal Reserve weighs its next steps on a monetary policy. Stocks have fallen this week on concerns that a strong labor market and a resilient economy may cause the central bank to maintain profit levels longer than expected.
The Fed is trying to bring inflation back to 2% a year, a goal that has been difficult to achieve even though the rate of price increases has slowed from a peak in mid-2022. Most measures show inflation is above 3%, although the Fed's preferred measure is below that level. That.
Market assessments point toward a first rate cut in June, although some Fed officials, including Chairman Jerome Powell, this week indicated they were more inclined to take a cautious approach looking at the data.
