New Jobs Report Released; Here's What CU Economists Say

WASHINGTON–The newest jobs report data indicate the labor market is moving away from a state of “imbalance,” but there remains “work to be done,” according to credit union economists.

Data released today by the Labor Department show U.S. employers added 236,000 workers in March, with the unemployment rate falling to 3.5%.

The data indicate the labor market remains solid even after a year of aggressive rate increases by the Federal Reserve as it has sought to tamp down inflation. Employers added jobs last month in leisure and hospitality, government, professional and business services and healthcare. Fewer jobs were seen construction, manufacturing and retail, the Labor Department said.

Dawit Kebede

“Employers added 236,000 jobs in March, which is a slower hiring rate compared to the past two months. Labor force participation increased by one-tenth of a percentage point with 480,000 people joining the job market,” said CUNA Senior Economist Dawit Kebede. “Additionally, the hourly wage growth continued to moderate. Despite the slowdown in hiring, the labor market remains robust, with a low unemployment rate of 3.5%. 

"The latest labor department report, along with other indicators released this week, suggests that the labor market is gradually moving away from a state of high demand-supply imbalance,” Kebede continued. “According to the Job Openings and Labor Turnover Survey (JOLTS), vacancies declined by 632,000 in February, leading to a decrease in the number of job openings available per unemployed person from 1.9 to 1.7. The rise in participation and fall in vacancies indicate less tight conditions compared to the previous months. 

"The slower hiring rate, moderate wage growth, reduced vacancies, and increased participation are steps in the right direction for the Federal Reserve's objective of bringing inflation down to target." 

NAFCU: Work to Be Done

Curt Long

Meanwhile, NAFCU Chief Economist and Vice President of Research Curt Long, stated, “The March jobs report confirms that while progress continues on the inflation front, there is more work to be done. Job growth decelerated and labor force participation ticked up, both of which point to easing labor market tensions. However, hiring continues at a solid pace and there is no sign of the labor market slack that the Federal Reserve believes is needed to dent inflation. While more rate hikes may be in store, the good news is that there are no signs in the labor market yet that a recession is imminent."

The Labor Department data show the labor force grew in March, helping take pressure off wage growth. Average hourly earnings rose 4.2% last month from a year earlier, an easing from recent months.

“The great labor market machine is finally slowing down some, but it’s still got a lot of strength left,” Robert Frick, corporate economist at Navy Federal Credit Union, told the Wall Street Journal.