The economy added 431,000 jobs in March and unemployment fell to pre-pandemic rates, signaling that the labor market is hot.
The headline job growth number in Friday’s employment report from the Bureau of Labor Statistics fell slightly short of expectations, but other details of the report showed underlying momentum — especially the 3.6% unemployment rate, the lowest since February 2020, the last month before pandemic shutdowns began.
Friday’s report also revised the employment gains for February and January, which now look very strong. The economy added 1.7 million jobs in the first quarter, defying expectations that the omicron variant of COVID-19 would cause a pullback in the job market.
Friday morning’s report will be helpful to President Joe Biden and his administration. He has languished with declining approval ratings as Republicans use the economy as a cudgel, in particular the high inflation rate, against him and Democrats at large.
“Net, net, the good news is the economy is creating more jobs and putting thousands of Americans to work, the bad news is it is hard for companies to hire unless they boost worker wages and this produces more inflation,” said Fwdbonds’s chief economist Christopher Rupkey. “The Federal Reserve has switched gears from fighting joblessness to trying to extinguish the inflation fires roaring out of control.”
JOBLESS CLAIMS INCH UP TO 202,000, NEAR LOWEST LEVEL IN DECADES
The unemployment rate, which fell two-tenths of a percentage point to 3.6%, is far better than its peak of 14.7% during the worst of the pandemic. The unemployment rate has ticked down nearly every month over the last two years and is now close to the ultralow 3.5% it was in February 2020, just before the onset of the global health crisis.
Even more encouragingly, labor force participation surged in March. For workers in their prime working years, that is, ages 25 to 64, the overall employment rate is now just a half-percentage point from where it was before the pandemic.
Despite the positive job growth, the Biden administration remains plagued by inflation. Consumer prices increased 7.9% in the 12 months ending in February, the fastest rate of inflation in four decades.
The Federal Reserve just raised interest rates for the first time in years, and Fed Chairman Jerome Powell has indicated that the central bank could move to raise rates even more aggressively than previously thought to beat back the higher prices.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
“The near-term effects on the U.S. economy of the invasion of Ukraine, the ongoing war, the sanctions, and of events to come remain highly uncertain,” Powell told Congress recently. “Making appropriate monetary policy in this environment requires a recognition that the economy evolves in unexpected ways. We will need to be nimble in responding to incoming data and the evolving outlook.”
