Employers in the United States added 303,000 workers to their payrolls in March, the Department of Labor said Friday.
The unemployment rate ticked down to 3.8 percent from 3.9 percent in the prior month.
Economists had forecast payrolls would grow by 200,000 and the unemployment rate would hold steady at the prior month’s 3.9 percent.
Last month, the government reported that the economy added 275,000 jobs in February, beating expectations by around 75,000, and 229,000 in January.
The January figure was revised up by 27,000 to 256,000, and the February estimate was revised down by 5,000 to 270,000. After those revisions, employment was 22,000 higher than previously reported.
After the revisions and the March numbers, the three-month moving average moved up from 265,000 to 276,000.
Private sector employment grew by 232,000, up from 207,000 in February and 196,000 in January. Construction employment grew by a very strong 39,000 but manufacturing employment was flat. Health care and social assistance private sector employers added 81,300 jobs. Leisure and hospitality added 49,000. Government employment grew by 71,000.
Both the labor force participation rate, at 62.7 percent, and the employment-population ratio, at 60.3 percent, have not moved much over the past year despite rising wages and a tight labor market. In March, both measures were unchanged.
Hourly earnings for all employees on private nonfarm payrolls increased by 12 cents, or 0.3 percent, to $34.69. Over the past 12 months, average hourly earnings have increased by 4.1 percent, a pace that many economists consider too fast to be consistent with inflation rising at a two percent rate. Average hourly earnings of private-sector production and
nonsupervisory employees edged up by 7 cents, or 0.2 percent, to $29.79.
At the start of this year, the consensus among economists and investors was that the Fed would cut rates by as many as six times beginning with the March meeting. After the Fed surprised many investors by indicating in January that it would not be ready to cut at its March meeting, many investors believed cuts would begin in at the next meeting in May.
There has been discussion in recent months about the possibility that the official jobs numbers—the product of the so-called “establishment survey,” which asks employers about payroll changes—may be overstating employment. The household survey, which asks individuals about their employment status, has been reporting much smaller gains or even reductions in employment than the establishment survey.
This month, however, that pattern broke. The household survey showed employment rising by 469,000, more than the establishment survey. Breitbart Business Digest expects that overtime the household survey numbers will rise to reflect the establishment survey, ultimately confirming the strong labor market depicted by the reports from employers.
Data suggesting that the economy has continued to grow and add jobs has now pushed off the expected date of the first cut until June and pressed down the expected number of cuts to three. A survey by the Wall Street Journal of economists at major banks found that almost all expect a June cut. The only exceptions are economists at Nomura, who expect a July cut, and Mizuho, who are forecasting no cut this year.
The sell-side bank and Fed forecaster consensus is now aligned in expecting the first rate cut in June, with the previous outliers recently junking their recession calls.
The uniformity here oversells the degree of conviction around a June cut. These have moved a lot in 2024. https://t.co/yJ1fFhLLnG pic.twitter.com/ijNF8zFPeG
— Nick Timiraos (@NickTimiraos) April 2, 2024
The Fed typically cuts rates when the economy appears to be weakening. Although growth was very strong last year, especially in the second half of the year, economists believed that the rate hikes the Fed had implemented from March of 2022 through July of 2023 would become a significant drag on growth and the labor market this year.
Some Democrat politicians, progressive economists, and Wall Street analysts have said that the Fed is risking an unnecessary recession by holding back on rate cuts. Fed officials, including chairman Jerome Powell, have insisted that the strength of the labor market and the overall economy gives them room to be patient.
Recently, some analysts have concluded that the Fed may not cut interest rates at all this year. James Bianco of Bianco Research is predicting no cuts this year. Breitbart Business Digest, a free daily newsletter offered by Breitbart News, forecasts that the Fed will not cut rates this year and has said that the risk of a rate hike is much higher than Wall Street thinks.
Minneapolis Fed president Neel Kashkari said on Thursday that he expects two cuts from the Fed this year but warned that it is possible the Fed might not cut at all.
In total, the economy added over 2.4 million jobs in 2023, the lowest since the pandemic ended and Joe Biden became president. Compared with the pre-pandemic years, however, this was a high level of job growth, much of it driven by sectors still rebuilding from mass layoffs due to lockdowns and the pandemic. The last time the economy added this many jobs in a year was 1999.
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