U.S. job growth unexpectedly surged in January, highlighting the resilience of the labor market despite high interest rates and stubborn inflation.
Employer added Employment in March was 303,000 peopleThe figure was well above the 200,000-job increase expected by economists at LSEG, the Labor Department said in its monthly payroll report released Friday. The unemployment rate fell slightly to 3.8% from 3.9% in February.
But wage growth was further subdued last month, with average hourly wages, a key indicator of inflation, rising 0.3%, in line with expectations. On an annual basis, wages rose 4.1% in March.
“March’s jobs report shows the extraordinary resilience of the labor economy,” said Jim Baird, chief investment officer at Plante Morgan Financial Advisors. It’s powerful.” “The labor market has come out of the boil a few years ago, but remains on very solid footing.”
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Surprisingly strong report highlights job market remaining largely intact despite the Federal Reserve’s aggressive interest rate hike campaign, but the possibility of an imminent rate cut It is also decreasing.
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Markets are watching the report for evidence that the labor market is finally softening after months of solid job growth as Fed policymakers consider when to start cutting interest rates. Inflation has fallen dramatically from its peak, but progress since the summer has been roughly flat.
Officials have signaled they are in no hurry to cut rates, saying they expect future economic data to guide their decision.
“Some were expecting the Fed to cut rates at its June meeting, but today’s strong jobs report means the first rate cut won’t happen until July,” said Lisa Sturtevant of Bright MLS. It’s almost certain.” Chief economist.
As an investor, stocks ignored the strong jobs report. About 60% of investors are still pricing in a quarter-point rate cut in June, according to CME Group’s FedWatch tool, which tracks possible future moves.
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Last month’s job gains were broad-based, with the largest increases in health care (72,000), government (71,000), leisure and hospitality (49,000), and construction (39,000).
The labor market has remained historically tight over the past year, contrary to economists’ predictions of an economic slowdown.
“Another strong jobs report suggests the economy is in good shape and far from recession,” said Sonu Verghes, global macro strategist at Carson Group. “Ultimately, this will postpone any rate cuts by the Fed, but slower wage growth means we are not in the midst of a labor market-induced inflation spike. .”
