U.S. posts another month of job growth

Employers hiring to keep up with consumer demand

Employers in the United States delivered another outpouring of jobs in March, adding a sizzling 303,000 workers to their payrolls and bolstering hopes the economy can vanquish inflation without succumbing to a recession in the face of high interest rates.

Last month’s job growth was up from a revised 270,000 in February and was far above the 200,000 jobs that economists had forecast.

By any measure, it amounted to a major burst of hiring, and it reflected the economy’s ability to withstand the pressure of high borrowing costs resulting from the U.S. Federal Reserve’s interest rate hikes.

With the country’s consumers continuing to spend, many employers have kept hiring to meet steady customer demand.

Friday’s report from the U.S. Labor Department also showed that the unemployment rate dipped from 3.9 per cent to 3.8 per cent.

The jobless rate has now come in below four per cent for 26 straight months, the longest such streak since the 1960s.

The government also revised up its estimate of job growth in January and February by a combined 22,000.

Normally, a blockbuster bounty of new jobs would fan worries that a vibrant labour market would force companies to sharply raise pay to attract and keep workers, thereby fanning inflation pressures.

But the March jobs report showed that wage growth was mild last month, which might allay any such fears.

Average hourly wages were up 4.1 per cent from a year earlier, the smallest year-over-year increase since mid-2021.

The economy is sure to weigh on Americans’ minds as the November presidential vote nears and they assess U.S. President Joe Biden’s reelection bid.

Many people still feel squeezed by the inflation surge that erupted in the spring of 2021. Eleven rate hikes by the Fed have helped send inflation tumbling from its peak over the past year and a half.

But average prices are still about 18 per cent higher than they were in February 2021.

In a statement, Biden argued the economy’s strong performance means that his economic policies are paying off.

“My plan is growing the economy from the middle out and the bottom up, investing in all Americans and giving the middle class a fair shot,” he said.

“Inflation has come down significantly. We’ve come a long way, but I won’t stop fighting for hard-working families.”

The unemployment rate fell in March even though a sizable 469,000 people entered the labour force.

That influx increased the proportion of Americans who either have a job or are looking for one from 62.5 per cent in February to 62.7 per cent.

A bigger labour force tends to ease pressure on companies to significantly raise wages, thereby slowing inflation pressures.

The Fed’s policymakers are tracking the state of the economy, the job market and inflation to determine when to begin cutting interest rates from their multi-decade highs — a move eagerly awaited by Wall Street traders, businesses, homebuyers and people in need of cars, household appliances and other major purchases that are typically financed.

Rate cuts by the Fed would likely lead, over time, to lower borrowing rates across the economy.