U.S. job growth blows past expectations

WASHINGTON — U.S. employers hired far more workers than expected in March and continued to lift wages at a steady clip, suggesting the economy ended the first quarter on solid ground and potentially delaying anticipated Federal Reserve interest rate cuts this year.

The Labour Department’s closely watched employment report on Friday also showed the unemployment rate fell to 3.8% last month from 3.9% in February.

The decline in the jobless rate reflected a sharp rebound in household employment, which more than absorbed the 469,000 people who joined the labor force.

The U.S. economy is outshining its global peers even though the Fed has raised rates by 525 basis points since March 2022 to dampen inflation.

Economists say most businesses locked in lower borrowing costs prior to the U.S. central bank’s tightening cycle, providing some insulation from higher borrowing costs and allowing them to keep their workers.

The labor market is also benefiting from a rise in immigration over the past year.

“The economy seems to have adapted to a new normal of higher rates and today’s data does not increase the urgency for the Fed to make cuts,” said Eric Merlis, managing director and co-head of global markets at Citizens Bank.

Nonfarm payrolls increased by 303,000 jobs last month, the Labour Department’s Bureau of Labor Statistics said. The economy added 22,000 more jobs than previously estimated in January and February.

Economists polled by Reuters had forecast 200,000 jobs in March, with estimates ranging from 150,000 to 250,000.

The nearly broad increase in employment last month was led by the healthcare sector, which added 72,000 jobs, spread across ambulatory services, hospitals as well as nursing and residential care facilities.

Reuters