The U.S. economy added 236,000 jobs in March and the unemployment rate declined to 3.5 percent, as labor markets stayed tight despite interest rate hikes by the Federal Reserve.
Analysts were expecting the economy to add 238,000 jobs and for the unemployment rate to hold steady at 3.6 percent.
The U.S. labor market has remained strong in the face of nine consecutive rate hikes by the Fed, but the central bank is still projecting the unemployment rate to hit 4.5 percent this year, according to its latest summary of economic projections.
While jobless claims for the week ended April 1 dropped by 18,000 to 228,000, numbers for the previous week received a substantial revision upward, leading some analysts to believe that slacker labor markets were on the horizon.
But Friday’s jobs report continues a familiar story of a remarkably resilient labor market distinguished by high churn in the face of nine consecutive interest rate hikes by the Fed. Employers added 311,000 jobs in February following a whopping addition of 504,000 jobs in January.
Even as unemployment ticked down in line with the Fed’s mandate of maximum employment, Friday’s jobs report showed moderating growth in wages, which is good news for price stability.
Average hourly earnings increased by 9 cents to $33.18, bringing annualized wage growth over the last three months to 3.2 percent, down from 3.6 percent in February. On an annual basis, it’s up 4.2 percent, considerably lower than prices across the economy.
The Fed is expecting the unemployment rate to rise to 4.5 percent this year, a full percentage point above where it is now. That amounts to an additional 1.7 million people out of work by the end of the year, according to a calculation by The Hill, as the Fed slows the economy in response to elevated price levels.
Updated at 9:39 a.m.