March Jobs - Solid But Moderating

Job gains moderated, unemployment declined.  With 236K jobs added in March, payroll additions aligned closely with expectations, but marked the lowest monthly gain since December 2020 amid Fed efforts to slow labor demand and cool inflation.  Meanwhile, the unemployment rate fell slightly to 3.5%.  Average hourly earnings increased 0.3% compared to February contributing to wage growth of 4.2% over the last year, down from 4.6% a month ago and the lowest reading since June 2021.  Overall, today’s report, in isolation, is unlikely to materially influence Fed plans.

• 236K jobs added in March – in line with expectations.  The U.S. labor market added 236K jobs in March compared to forecasts ranging from -10K to +300K with a median of +230K.  February’s outcome (+311K) was revised slightly higher to +326K.  Notable job gains were seen once again in leisure & hospitality (+72K), government (+47K), professional & business services (+39K), and health care (+34K).  Employment showed little change in other major industries.
• 3.5% unemployment – little changed from February.  The U.S. unemployment rate fell slightly to 3.5% from 3.6% a month ago.  Forecasts ranged from 3.5% to 3.7% with a median of 3.6%.  The labor force participation rate increased slightly to 62.6% – the highest since March 2020, continuing a steady climb over the last four months.  Hourly earnings increased 4.2% over the last year (below expectations of +4.3%; down from 4.6% in February) and 0.3% month-over-month (in line with expectations; up from +0.2% in February).