On Friday, the Labor Department reported March job growth well below February’s upwardly revised figure of 326,000.
US job growth rose to 236,000 in March amid signs of a slowdown in the job market. The figure puts Friday’s payroll growth from the Labor Department report close to the Dow Jones estimate of 238,000 for March. However, total job growth of 236,000 is substantially below February’s upwardly revised figure of 326,000.
The March job growth report revealed that the unemployment rate fell to 3.5% compared to a threshold expectation of 3.6%. This nonfarm payroll decline came despite labor force participation rising to its highest level since before Covid began.
Although the March Nonfarm Payroll report is close to what analysts were expecting, it still represents the lowest monthly gain since December 2020. Additionally, the 236,000 job growth came as the Federal Reserve scrambled to reduce labor demand. to control inflation.
The March payroll gains were accompanied by a 0.3% increase in average hourly earnings. Although this increase brought the overall 12-month increase to 4.2%, it is still the lowest since June 2021. Additionally, the average workweek has dropped to just over 34 hours.
March Job Growth Sector Breakdown
In Friday’s nonfarm payroll, leisure and hospitality led all reported sectors with growth of 72,000 jobs. However, the registered number of jobs still pales in comparison to the pace of 95,000 in the last six months.
Health Care and Social Assistance was the second highest sector, with growth of more than 50,000 jobs, while Government was third with 47,000 jobs. Rounding out the top 5 sectors are Professional and Commercial Services, and Transportation and Warehousing. The former posted growth of 39,000, while the latter saw a much smaller employment gain of just over 10,000 jobs in March.
By contrast, Retail bottomed out among reported sectors, losing approximately 15,000 jobs. Other bankrupt sectors include Construction, which posted a loss of 9,000, and Manufacturing and Financial Activities, with -1,000 jobs each.
Earlier this week, companies reported that layoffs were up roughly 400% year-over-year (YoY) in March. Additionally, there was an increase in jobless claims, with the Labor Department reporting a drop of 10 million jobs in February.
The Federal Reserve has raised its benchmark interest rate by 4.75% amid a never-before-seen tight job market. This week several officials at the main bank expressed an unwavering commitment to reining in inflation. However, markets remain jittery amid rising interest rates, with at least one more hike likely in May.
Fed rate hikes
Investors’ constant concern is that the Fed’s constant rate hikes could jeopardize the economy and trigger a recession. Late last month, the US central bank raised interest rates by 25 basis points despite the banking crisis triggered by Silicon Valley Bank.
However, BlackRock’s chief investment officer Rick Rieder fully supports the increases, suggesting a sustained rate hike schedule in early March. As Rieder said at the time:
“We think there’s a reasonable chance the Fed may have to bring the fed funds rate to 6% and then keep it there for an extended period to slow the economy and bring inflation down to around 2%.”
According to the CEO of BlackRock, embarking on more hikes is the only way to manage the current state of the economy.
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Tolu is a Lagos-based blockchain and cryptocurrency enthusiast. He likes to demystify the crypto stories down to the basics so that anyone anywhere can understand them without too much prior knowledge. When he’s not up to his neck in crypto-stories, Tolu likes music, loves to sing, and is an avid movie buff.
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