The numbers: The U.S. created a steady 431,000 jobs in March and the unemployment rate took another step toward a half-century low, as companies pushed to add staff and more people entered the labor force in search of work.
The unemployment rate slid to 3.6% from 3.8%, the government said Friday. Just before the pandemic, the jobless rate had sunk to a 50-year low of 3.5%.
The solid March employment report underscores why the Federal Reserve is moving to jack up a key short-term U.S. interest rate this year after keeping it near zero during the pandemic.
The rate of inflation has soared to a 40-year high of almost 8% and surging wages are now adding to the price pressures.
Hourly pay rose sharply again in March and pushed the increase in the past 12 months to 5.6%, the highest rate since the early 1980s.
One caveat: The jobs report has also been less reliable over the past year owing to the waxing and waning of the pandemic. The estimates have been subject to large revisions months later.
Yet by any measure the labor market is tight. Job openings are at record highs, layoffs are at record lows and most businesses want to hire
Stock-index futures trimmed gains somewhat to remain slightly higher after the jobs data. Treasury yields remained higher, with the 10-year rate above 2.41%.
Big picture: The roaring jobs market is the economy’s lifeline in a time of rising inflation and the global fallout from the Russian invasion of Ukraine.
So long as most Americans have a job and feel secure in their job, economists say, the U.S. is likely to keep growing at a steady pace. Consumer spending is by far the biggest driver of the economy and people are still spending plenty of money.
The water is getting choppier, however.
Rising interest rates could slow sales of homes, autos and other big-ticket items and reduce business investment. The Ukraine conflict and Covid lockdowns in China could also add to upward pressure on prices.