The US labor market added 236,000 jobs in March, a figure similar to what had been forecast (238,000). This number is still considered strong, although it indicates a slowdown compared to recent months, after a year of aggressive monetary policy by the Federal Reserve (Fed), which has placed interest rates at a maximum of 5% to combat the inflation.
Unemployment fell to 3.5% (it was one tenth higher), again the lowest level in half a century. This is explained because the number of Americans who were part of the working population stood at 62.6%, above the 62.5% in February. This issue also exhibits the belief that there are good job opportunities. It is the largest workforce since the pre-pandemic era.
But this increase in new employees shows that little by little a labor market is cooling off, which has proven to be much more resilient and robust than had been predicted.
In February, 326,000 jobs were created (in an upward revision), which was already a setback compared to the record of 517,000 in January, both amounts well above what had been forecast. In the first two months of 2023, 800,000 jobs have been created, despite the massive layoffs in the large technology sector that during the covid crisis fattened their workforces.
The data for March make it clear that employers and businesses maintain their appetite for hiring, regardless of the problems in the banking system or the economy losing steam or not, while recession predictions continue to be made in the coming months.
The Fed closely watches the behavior of the labor market to make decisions about upcoming interest rate hikes. Another very relevant piece of information for the Reserve is the salary increase that last March stood at 0.3% on average per hour, which means that at an annualized level it reached 4.2%, the lowest percentage since July 2021.
Although there has been a strong level of hiring, the March record represents the smallest gain since December 2020.
Leisure and hospitality (bars, restaurants) remain the sectors with the highest job creation, with 72,000. However, this represents a shrinkage compared to the 95,000 average of the last six months. In contrast, retail establishments lost 15,000 workers.
