On Friday, the Labor Department reported a March job growth that is way off February’s upwardly revised figure of 326,000.
US job growth amounted to 236,000 for March amid slowing signs in the labor market. The figure puts the Labor Department’s Friday payroll growth report close to the Dow Jones estimate of 238,000 for March. However, the total job growth of 236,000 sits substantially below February’s upwardly revised figure of 326,000.
The March job growth report revealed that the unemployment rate dipped to 3.5% compared to a 3.6% threshold expectation. This nonfarm payroll decrease occurred despite labor force participation increasing to its highest level since before Covid began.
Although March’s nonfarm payroll report is close to what analysts expected, it still represents the lowest monthly gain since December 2020. Furthermore, the 236,000 job growth came as the Federal Reserve strived to slow labor demand to rein in inflation.
March’s payroll gains were accompanied by a 0.3% rise in average hourly earnings. Although this increase hiked the overall 12-month increase to 4.2%, it still represents the lowest since June 2021. Additionally, the average work week dipped lower to just over 34 hours.
March Job Growth Sector Breakdown
Friday’s nonfarm payroll saw leisure & hospitality lead all reported sectors with a 72,000 job growth. However, the recorded number of jobs still pales compared to the 95,000 pace within the last six months.
Health Care and Social Assistance was the second-highest sector, with a growth of over 50,000 jobs, while the Government placed third with 47,000 jobs. Rounding out the top 5 sectors are Professional & Business Services, and Transportation & Warehousing. The former recorded growth of 39,000, while the latter saw a much lower employment increase of just over 10,000 jobs in March.
Conversely, Retail bottomed out among reported sectors, losing approximately 15,000 jobs. Other failing sectors include Construction, which recorded a 9,000 loss, and Manufacturing and Financial Activities, with -1000 jobs apiece.
Earlier this week, companies reported that layoffs surged approximately 400% year-over-year (YoY) in March. In addition, there was an increase in jobless claims, with the Labor Department reporting a 10-million job opening slump in February.
The Fed has increased its benchmark borrowing rate by 4.75% amid a never-before-seen tight labor market. This week, several officials from the apex bank expressed an unwavering commitment to controlling inflation. However, markets remain on edge amid rising interest rates, with at least one more hike likely occurring in May.
Fed Rate Hikes
Ongoing investor concern is that the Fed’s constant rate hikes could compromise the economy and bring about a recession. Late last month, the US central bank increased interest rates by 25 basis points despite the Silicon Valley Bank-triggered banking crisis.
However, BlackRock chief investment officer Rick Rieder fully supports the increases, suggesting a sustained rate hike agenda in early March. As Rieder put it at the time:
“We think there’s a reasonable chance that the Fed will have to bring the Fed Funds rate to 6% and then keep it there for an extended period to slow the economy and get inflation down to near 2%.”
According to the BlackRock CEO, embarking on more hikes is the only way to manage the economy’s current state.
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Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
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Source: https://www.coinspeaker.com/march-job-growth-236000/