- The US labor market remains strong despite rising interest rates
- The unemployment rate remained stable at 3.8 percent – in line with expectations
The U.S. economy added 303,000 jobs in March, significantly more than economists’ expectations of 200,000.
It is also higher than February’s increase of 270,000, indicating that a reduction in record high interest rates may still be some way off.
According to the government’s March employment report, the unemployment rate fell 0.1 percent to 3.8 percent, in line with expectations.
Job gains mainly occurred in healthcare and government, but also in the construction sector.
The unemployment rate fell by 0.1 percent to 3.8 percent in March
Wall Street is keeping a close eye on the jobs numbers. It doesn’t want employment to increase, but it also doesn’t want too many new jobs to be created, as that could be an indication that inflation will rise.
If the Federal Reserve thinks inflation is still high, it will delay plans to cut rates. That has a domino effect on the stock market.
Higher interest rates are seen as negative for large companies because it makes it more expensive for them to borrow money to invest – and it also reduces consumer spending.
That could push stock prices down to 401(K)s.
At 8:53 a.m. ET, 23 minutes after the report’s release, stock indexes were mixed, indicating the market is still processing the data. The S&P 500 recorded a slight increase.
Wall Street cut the odds that there would be three cuts this year to 92 percent from 97 percent before the report.
Wage growth remained above inflation, with hourly wages rising 4.1 percent from a year ago, but down from 4.3 percent last month.
The Fed has an inflation target of 2 percent, which typically equates to wage growth of 3 to 3.5 percent.
Many of the added jobs were in construction