(CN) — American employers added 431,000 jobs in March while the unemployment rate dropped to 3.6%, a new pandemic-era low.
Though payroll growth fell short of economists’ expectations of around 490,000 new jobs, the 3.6% jobless rate is better than predicted and is nearing the 3.5% level recorded in February 2020, just before the coronavirus pandemic brought the U.S. and global economy to a screeching halt.
A report released Friday by the Labor Department also shows February’s job gains were revised up from 678,000 to 720,000, bringing the average for the first quarter of the year to 562,000 new jobs a month. The economy is still down 1.6 million jobs compared to its pre-pandemic level.
Nick Bunker, economic research director at Indeed Hiring Lab, said the American labor market “keeps humming along.”
“The job market is on a solid trajectory as robust demand pulls more workers into employment with strong and increasingly stable wage growth,” he wrote.
Continuing a trend seen throughout the course of the pandemic recovery, payroll gains in March were driven by leisure and hospitality, the industry hit hardest by Covid-19 lockdowns. It added 112,000 jobs, including 61,000 at food and drinking establishments and 25,000 in lodging. As a whole, the sector is still down 1.5 million jobs since February 2020.
Professional and business services came in a close second with 102,000 positions added last month. The industry is up 723,000 jobs over the last two years.
Notable gains were also seen in retail (49,000), manufacturing (38,000), social assistance (25,000), construction (19,000) and financial activities (16,000).
The health care sector gained just 8,000 positions in March and is still down 298,000 compared to its pre-pandemic level. Job growth stayed largely flat for other industries like transportation and warehousing, mining and wholesale trade.
In the public sector, a gain of 20,000 jobs at the local government level was mostly offset by losses of 1,000 in federal government and 14,000 in state government, including nearly 6,000 fewer jobs in education.
“The 431,000 rise in nonfarm payrolls is another sign that the real economy has plenty of momentum, though with those gains now being helped by a stronger rebound in the labor force, there are signs that wage growth may have peaked,” said Michael Pearce, senior U.S. economist at Capital Economics.
Bunker also noted that pay growth seems to have leveled off.
Wage growth “continues to hold steady, as year-over-year growth was 6.7% for production and nonsupervisory workers. However, this is the same rate these workers saw in both February and January,” Bunker wrote. “At least among this group of workers, wages are no longer accelerating.”
On the employer side, concerns over labor shortages that made headlines last year appear to be abating.
“Demand for workers continues to be strong, but the potential easing suggests that the current temperature of the labor market might not last forever,” Bunker said. “A slightly cooler labor market would be a more sustainable one, but hopefully the temperature doesn’t drop too much.”
Speaking from the White House on Friday morning, President Joe Biden touted the March jobs report and noted the 3.6% unemployment rate is down from 6.4% when he took office in January 2021.
“Americans are back to work and that’s good news for millions of families who have a little more breathing room and the dignity that comes from earning a paycheck,” he said.
Biden said more people getting jobs means an easing of supply chain pressures, which will help in the fight against inflation.
“It means that our economy has gone from being on the mend to being on the move,” he said.
He added that “this job is not finished” and more needs to be done to get U.S. consumer prices under control. Blaming Russian President Vladimir Putin’s invasion of Ukraine for a spike in gas and food prices around the world, the president noted he ordered the release of 180 million barrels of oil from the nation’s strategic reserves to help Americans at the pump.
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