The US economy added fewer jobs than expected in March as the labor market grew tighter.
The Bureau of Labor Statistics reported Friday that the unemployment rate was 3.6%. The economists were looking for 485,000 on payrolls and 3.7% unemployment.
An alternative measure of unemployment, which includes discouraged workers and those holding part-time jobs for economic reasons, fell to a seasonally adjusted 6.9%, down from the previous month.
The labor force participation rate increased one-tenth of a percentage point to 62.4%, to within one point of its pre-pandemic level in February 2020. The labor force grew by over 400,000 workers and is now close to the pre-pandemic state.
Average hourly earnings increased 0.4% in line with expectations. Pay increased nearly 5.6% over the course of a year. The average work week fell by 0.1 hour to 34.6 hours.
There was nothing shocking about this report. State Street Global Advisors chief economist Simona Mocuta said there was nothing surprising about the report.
Leisure and hospitality led job creation with a gain of 112,000.
Retail, manufacturing and professional and business services all contributed to the total. Social assistance, construction, and financial activities all reported gains.
A survey of households showed a total employment gain of 736,000. The employment level was close to where it stood before the crisis.
Revisions from prior months were strong. February's total was revised up to 750,000 from the initial 678,000. The job growth for the first quarter was an average of 562,000.
The economy is at a critical juncture in its recovery. There is more job openings than available workers, despite the fact that hiring on the top line has been strong.
In the first quarter, growth is expected to be minimal. An inventory rebuild last year helped propel the biggest yearly gain since 1984 and multiple factors kept advancement in check.
Inflation has been the biggest focus, running at its fastest pace since the early 1980s, and helping restrain consumer spending as wage gains haven't been able to keep up with prices. Sentiment and supply chain issues have been affected by the war in Ukraine. The red-hot housing market is showing signs of slowing.
A series of interest rate hikes by the Federal Reserve will slow growth.
Markets are expecting the Fed to raise the federal funds rate by half a percentage point in May and 2.5 percentage points before the end of the year.
There was nothing in Friday's report that would change that outlook.
The wage picture is critical, according to the State Street economist. If you get confirmation that the wage growth is slowing, that could allow the Fed to rethink.
This is breaking news. You can check back here for updates.
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