U.S. employers added 236,000 jobs in March, suggesting to economists that the economy may not dip into recession despite numerous Federal Reserve interest rate hikes.
The national unemployment rate fell to 3.5%, just above the 53-year low of 3.4% set in January.
The Friday jobs report from the Labor Department also showed signs that inflationary pressures might be easing. Average hourly wages were up 4.2% from a year ago, down from the 4.6% year-over-year increase in February.
Last month’s number was well under the 326,000 jobs created in February.
“The labor market continues to show resilience despite the Fed’s efforts to tame inflation by raising interest rates,” said Eric Merlis, managing director and co-head of global markets at Citizens, in a statement. “Today’s report should not deter the Fed from continuing its efforts to bring inflation to its target zone.” “Today’s report is a Goldilocks report,” Daniel Zhao, lead economist at Glassdoor, told the Associated Press. “It’s hard to find a way it could have been better. We do see that the job market is cooling, but it’s still resilient.’’
March’s job growth was led by leisure and hospitality, which added 72,000 positions. Restaurants and bars accounted for 50,000 of those.
State and local governments added 39,000 and health care companies 34,000.
Construction companies, however, cut 9,000 jobs, that sector’s first such reduction since January 2022. Factories also reduced payrolls slightly for a second straight month as manufacturing slowed.
Though unemployment remains higher for people of color than for white Americans, the unemployment rate for Black workers dropped in March to 5%, the lowest recorded in government records dating to 1972.
The March numbers are the last jobs report the Fed will see before its next meeting May 2-3, the AP reported. Its policymakers will gain a clearer view of inflationary pressures next week, when the Labor Department issues reports on consumer and wholesale prices.
Daniel Zhao is one of the economists holding out hope that the economy can avoid a recession brought on by Fed rate increases.
“Today’s job market does not look like one that’s about to tip into recession,” he said. “I wouldn’t bet against the job market.’’
Paula Wolf is a freelance writer