The government report on Friday showed that the increase in employment last month contributed to the reduction of the unemployment rate to 3.6%. This is the lowest rate since the pandemic broke out two years ago and just above the half-century low of 3.5% reached two years ago.
Despite the burst of inflation, persistent supply bottlenecks, damage from COVID-19 and now a war in Europe, employers have added at least 400,000 jobs for 11 consecutive months. In its report Friday, the government also sharply revised its estimate for hiring in January and February by a total of 95,000 jobs.
The March report outlined a bright picture of the labor market, with steady recruitment and rising wages in many industries. The average hourly wage has risen by 5.6% in the last 12 months, welcome news for employees across the economy.
However, these wage increases do not go hand in hand with rising inflation, which has pushed the Federal Reserve on a good path to raising interest rates several times, perhaps aggressively, in the coming months. These interest rate hikes will lead to more expensive loans for many consumers and businesses. Meanwhile, increases in workers’ wages, a response in many cases to labor shortages, are fueling the inflationary pressures of the economy themselves.
Since the pandemic hit in 2020, many people have remained on the margins of the labor market, a trend that has contributed to a shortage of workers in many industries. However, as an encouraging sign for the economy, 418,000 people started looking for work in March and many found one.
Last year, 3.8 million people returned to the workforce, which means they now either have a job or are looking for one. The size of the workforce is now just 174,000 less than it was in February 2020, just before the pandemic hit the economy.
Employment growth in March, although steady, was the lowest since September. Jason Pride, head of private equity investment at Glenmede, said it reflected labor market resilience amid many obstacles.
“The US job market remains a bright spot in an otherwise challenging economic environment flooded with inflation and geopolitical risks,” Pride said, “taking substantial steps to overcome the COVID-19 pandemic.”
Across the economy, hiring profits were widespread last month. Restaurants and bars added 61,000 jobs, retailers 49,000, manufacturers 38,000 and hotels 25,000. Construction jobs have increased by 19,000 and have now returned to pre-pandemic levels.
However, some economists have been cautious, suggesting that the prospect of much higher lending rates planned by the Fed will inevitably slow the labor market and the overall economy.
“We continue to expect the Federal Reserve to raise interest rates rapidly to deal with rising inflation, and that this report only adds to the urgency of their plans to do so,” said Mike Fratantoni, chief economist at the Bank Mortgage Association.
At present, the labor market continues to recover at an unexpected rate from the coronavirus recession. Jobs are near record levels, and unemployment benefits have fallen almost to their lowest level since 1969.
Driven by generous federal aid, savings accumulated during the pandemic, and extremely low lending rates orchestrated by the Fed, American consumers spent so quickly that many factories, warehouses, shipping companies of their customers. Supply chains have been grunting, forcing prices to rise.
As the pandemic has subsided, consumers are increasing their spending beyond goods on services such as health care, travel and leisure, which they have long avoided during the worst of the pandemic. The resulting high inflation is causing difficulties for many lower-income households, which are facing sharp price increases for basic necessities such as food, gasoline and rent.
It is not clear how long the economy can maintain last year’s momentum. State aid controls are gone. The Fed raised its key short-term interest rate two weeks ago and will likely continue to raise it next year. These interest rate hikes will lead to more expensive loans for many consumers and businesses.
Inflation has also eroded consumer power: Hourly wages, adjusted for higher consumer prices, fell 2.6% in February from a year earlier – the 11th consecutive month in which inflation outpaced rising consumer prices. salaries from year to year. According to AAA, the average price of gasoline, at $ 4.23 a gallon, has increased by 47% compared to a year ago.
Compressed by inflation, some consumers are smoothing out their spending. The Commerce Department said Thursday that consumer spending rose just 0.2% in February – and fell 0.4% when adjusted for inflation – up from 2.7% in January.
However, the labor market continues to move forward. Employers posted a record 11.3 million jobs in February. Nearly 4.4 million Americans quit their jobs, a sign of confidence that they could find something better.
Copyright © 2022 by the Associated Press. All rights reserved.
Biden speech today: March 2022 jobs report shows employers added 431,000 jobs last month, unemployment rate shrinks to 3.6% Source link Biden speech today: March 2022 jobs report shows employers added 431,000 jobs last month, unemployment rate shrinks to 3.6%