Inflation is making it harder to afford day-to-day expenses, but at least wages are still rising and more people are getting jobs to help pay for it all.
- The U.S. economy added 431,000 jobs in March, marking the 15th straight month of growth in the labor market.
- Some economists had expected slightly more growth, but most said it was a solid showing.
- The unemployment rate fell to 3.6%, with the biggest improvement among people with less education.
- Wages continued to rise.
The U.S. economy added 431,000 jobs in March—slightly fewer than some economists had expected and the fewest for any month since September—but still a strong showing, many said. Not only has the labor market grown for 15 straight months, but the unemployment rate fell to 3.6% from 3.8%, putting it nearly back to the 3.5% rate that prevailed before the pandemic hit and rocked the economy, the Bureau of Labor Statistics said Friday.
The report will likely cement the notion that the economy is strong enough to withstand the Federal Reserve’s campaign to bring inflation under control, economists said. Fed officials plan to hike the central bank’s benchmark interest rate significantly this year and next to raise borrowing costs and tamp down spending. It also means most of the 22 million jobs lost in the pandemic have now been recovered, and that even with many analysts putting the odds of a U.S. recession higher now, workers remain in high demand, at least for the time being.
“It's really the workers who are in the driver's seat in this economy,” said Diana Furchtgott-Roth, an adjunct professor of economics at George Washington University and former chief economist at the Department of Labor. “I'm not sure how long it lasts, but this is what it is right now.”
While some economists had expected the number of jobs to grow by closer to 500,000, they were encouraged that January and February actually had bigger gains than previously reported (a total of 95,000 more jobs).
Plus, the hiring in March was widespread, with most sectors gaining jobs. The leisure and hospitality industry led the way with a pickup of 112,000 jobs as business at restaurants and hotels continued to recover amid receding cases of COVID-19.
Employers were willing to increase pay, too, with average hourly earnings rising 13 cents an hour to $31.73, a much bigger increase than February’s revised 4 cents an hour. Earnings have risen 5.6% in the past year—about twice as fast as they did before the pandemic—though that’s still not enough to keep up with soaring inflation. Consumer prices rose 7.9% in the 12 months through February, the latest month for which data is available.
“Americans are back to work,” President Joe Biden said in a speech at the White House. “And that’s good news for millions of families who have a little more breathing room and the dignity that comes from earning a paycheck—just the dignity of having a job.”
In a positive sign for employers trying to fill a near-record number of job openings around the country, the labor force participation rate, a measure of how many people are working or actively looking, continued to recover, rising to 62.4% from 62.3% and reaching a high point since the pandemic hit. It’s now more than two-thirds of the way back to where it was before COVID-19.
In fact, the unemployment rate fell faster for people with less education, signaling employers may be more willing to train people on the job. The unemployment rate fell to 4% from 4.5% for high school graduates, and to 3% from 3.8% for those with some college or an associate’s degree. For those with at least a bachelor’s degree, it inched down to 2% from 2.2%.
Despite the overall progress, there were some troubling signs in the report. The transportation and warehousing sector actually saw a small decline in jobs, likely because trucking companies are finding it hard to find drivers these days, Furchtgott-Roth said. And that won’t help the logistics labor shortages that have helped keep the supply chain snarled and inflation running hot.
“We can all see those Help Wanted signs for truckers,” she said.
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