The U.S. economy added more jobs than expected last month, signaling that the labor market remains relatively robust, which could provide the Federal Reserve with more headroom to delay the cutting of interest rate until later this year.
Nonfarm payrolls rose by 303,000 in March, above the revised lower 270,000 seen in February, according to data from the Labor Department’s Bureau of Labor Statistics. Economists had called for a reading of 212,000.
Average hourly earnings grew by 0.3% month-on-month, as expected, rising from a revised 0.2% in January. The unemployment rate, meanwhile, fell to 3.8% from 3.9% the prior month, remaining below 4% for 26 straight months, the longest such stretch since the late 1960s.
In March, job gains centered mainly around health care, government and construction, while employment in leisure and hospitality returned to its pre-pandemic February 2020 level.
Employment was little changed in retail trade, with gains in general merchandise retailers largely offset by job losses in building material and garden equipment and supplies dealers and in automotive parts and tire retailers.
The Fed stuck to its view of three rate cuts this year at its March meeting, raising hopes for a June cut, but a number of officials, including Chair Jerome Powell, have since stressed the need for the U.S. central bank to continue to study more data before a rate-cutting cycle is started.
Strong economic numbers, including surprise growth in U.S. manufacturing at the start of the week, have reined in expectations that interest rate cuts will start as soon as June.
Minneapolis Fed President Neel Kashkari added to the doubts on Thursday, stating that if inflation continues to stall, an interest rate reduction may not be required at all this year.
https://www.investing.com/news/economic-indicators/us-economy-added-more-jobs-than-expected-in-march-nonfarm-payrolls-rose-303000-3367104
