As expected, there were 431,000 added jobs in March, the eleventh straight month of growth, according to the Jobs Report for March 2022 released by the U.S. Bureau of Labor Statistics. Two days before today’s report was released, ADP announced its own payroll update, showing that private payrolls grew by 455,000 this past month.
Last month’s report showed 5 million more jobs than available workers, indicating a very tight market. Still, hiring has continued its upward pace toward pre-pandemic levels. The Department of Labor released a statement last Thursday showing that jobless claims are at their lowest since 1969. Since the unemployment rate has fallen and COVID-19 is continuing its recession, Americans are turning their attention to a new crisis: inflation.
This month’s report shows that wages have increased through the first quarter of 2022 but have not matched the surging inflation rate, which is at a 40-year high. Today’s report will be the basis for the central banks’ decision on interest rate hikes. Earlier in March, the Fed raised rates by .25% and we should expect to see more of this this year. Raising interest rates can be used to combat inflation by discouraging Americans from spending when the market is hot. Prices go up, so people put off high-ticket purchases and start saving their pennies. We’re seeing its effects in the housing market right now. Mortgage rates are back up and, combined with already soaring home prices, buyers are slowing down their searches.
Regardless, the strength of the US labor market is confirmed by March’s Jobs Report. All major industries showed gains, with the largest increases shown in leisure and hospitality which added 112,000 jobs. Professional and business services added 102,000 jobs, and manufacturing added 38,000 jobs. Health care employment remained much the same after a large gain last month. Surprisingly, retail employment was up by 49,000 jobs despite the February Job Openings and Labor Turnover Summary, which showed an increase of 20,000 separations within the industry.
It was another good month for the U.S. economy, but it’s not a victory yet. As the war in Ukraine continues, a recession remains a risk, especially with the current rate of inflation.