The United States added 431,000 jobs in March in a sign of economic health

U.S. employers extended a robust hiring streak in March, adding 431,000 jobs, a sign of the economy’s resilience in the face of a still-destructive pandemic and the highest inflation in 40 years.

The Labor Department report released on Friday showed job growth last month helped reduce the unemployment rate to 3.6%, the lowest level since the outbreak of the pandemic two years ago. years.

Despite soaring inflation, persistent supply bottlenecks, the adverse effects of COVID-19 and now a war in Europe, employers have created at least 400,000 jobs for 11 consecutive months. In its report on Friday, the government also revised up its estimate of hiring in January and February by 95,000 jobs combined.

An encouraging sign for the economy, 418,000 people started looking for work in March, and many have found one. Since the pandemic hit in 2020, many people have remained on the fringes of the labor market, a trend that has contributed to chronic labor shortages in many industries.

Across the economy in March, hiring gains were widespread. Restaurants and bars added 61,000 jobs, retailers 49,000, manufacturers 38,000 and hotels 25,000.

The average hourly wage is up sharply by 5.6% over the past 12 months. While this is good news for employees, it is contributing to rising inflationary pressures that have put the Federal Reserve on track to raise rates several times, perhaps aggressively, over the next few months. These rate increases will mean more expensive loans for many consumers and businesses.

For now, however, the labor market has continued to rebound at an unexpected speed since the coronavirus recession. Job vacancies are at near record highs and jobless claims have fallen to their lowest level since 1969.

The still strong U.S. labor market reflects a robust rebound from the brief but devastating coronavirus recession, which shed 22 million jobs in March and April 2020 as businesses closed or reduced hours and Americans stayed home. them to avoid infection.

But the recovery was quick. Fueled by generous federal aid, savings accumulated during the pandemic and ultra-low borrowing rates designed by the Federal Reserve, American consumers have been spending so fast that many factories, warehouses, shipping companies and ports have failed keep pace with customer demand. Supply chains collapsed, driving up prices.

It’s unclear how long the economy can sustain its momentum of the past year. The government relief checks are gone. The Fed raised its benchmark short-term interest rate two weeks ago and will likely continue to raise it until next year. These rate increases will mean more expensive loans for many consumers and businesses.

Inflation has also eroded consumers’ purchasing power: hourly wages, adjusted for consumer price inflation, fell 2.6% in February from a year earlier – the 11th month row in which inflation outpaced year-over-year wage growth. According to AAA, average gasoline prices, at $4.23 a gallon, were up 47% from a year ago.

Squeezed by inflation, some consumers are reducing their spending. The Commerce Department reported on Thursday that consumer spending rose just 0.2%% in February — and fell 0.4% after adjusting for inflation — compared to a 2.7% increase in January.

Yet the labor market continued to rush. Employers posted a near-record 11.3 million jobs in February. Nearly 4.4 million Americans have quit their jobs, a sign of confidence that they could find something better.

Even so, so many jobs have been lost in 2020 that the economy still remains 1.6 million below the number it had just before the pandemic hit. Over the past year, employers have added an average of 541,000 jobs per month. At this rate – no guarantee to continue – the nation would recover all jobs lost to the pandemic by June. (This would still not include any additional hires that would have been made over the past two years under normal circumstances.)

Over the past year, 3.6 million people have joined the US labor force, meaning they now have a job or are looking for one. But their ranks are still nearly 600,000 short of their February 2020 level, just before the pandemic hit the economy.

ABC News

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