U.S. job growth unexpectedly jumped in January, underscoring the resilience of the labor market even in the face of high interest rates and stubborn inflation.
Employers added 303,000 jobs in March, the Labor Department said in its monthly payroll report released Friday, easily topping the 200,000 gain forecast by LSEG economists. The unemployment rate inched lower to 3.8%, from 3.9% in February.
But wage growth was more subdued last month, with average hourly earnings — a key measure of inflation — rising 0.3%, in line with expectations. On an annual basis, wages increased 4.1% in March.
The surprisingly strong report paints a picture of a job market that has gone largely unscathed despite the Federal Reserve’s aggressive interest-rate hike campaign, but it also diminishes the odds of an imminent rate cut.
“Some had been hoping that the Federal Reserve would cut interest rates at its June meeting; however, with today’s strong jobs report, it is all but certain that the first rate cut won’t be before July,” said Lisa Sturtevant, Bright MLS chief economist.
The Federal Reserve signaled it is closely watching the report for evidence that the labor market is finally softening after months of solid job gains as policymakers try to ensure that inflation progress does not stall. The consumer price index has fallen dramatically from a peak of 9.1%, but remains above the Fed’s preferred 2% target, despite the rapid rise in interest rates.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Job gains were broad-based last month, with the biggest gains in health care (72,000), the government (71,000), leisure and hospitality (49,000) and construction (39,000).
The labor market has remained historically tight over the past year, defying economists’ expectations for a slowdown.
This is a developing story. Please check back for updates.
