US adds 236,000 jobs in March, unemployment drops to 3.5%

April 08, 2023 (MLN): The US economy added 236,000 jobs in March, showing a slowdown in job growth compared to the previous two months when the economy added 326,000 and 504,000 jobs in February and January, respectively, according to the latest non-farm payrolls report from the Bureau of Labor Statistics.

Despite the slowdown, the unemployment rate dropped by 0.1% to 3.5%, which is the lowest level since December 1969. The report also showed that job growth in the leisure and hospitality and healthcare sectors was lower than in previous months, although these industries are still trending upward in job availability.

In contrast, the government and professional and business services continued to grow at a similar pace to previous months.

The report's data is expected to heavily influence the Federal Reserve's decision on whether to continue or halt interest rate hikes at its next board meeting in early May.

If the labor market remains strong, the Fed may continue to raise interest rates to prevent inflation, but if job growth slows significantly, the Fed may halt rate hikes to support economic growth.

Andrew Hunter, the deputy chief US economist at Capital Economics, commented on the report, saying, "The 236,000 gain in non-farm payrolls in March adds to the evidence that the economy's strong start to the year was partly weather-related, with momentum fading again. With the sharp fall in job openings and upward trend in jobless claims also pointing to cooling labor demand, and the drag from the recent banking turmoil still to feed through, we expect jobs growth to slow more sharply soon."

Prior to the report's release, other indicators had also suggested that the labor market, while still growing, was cooling from the highs seen over the last two years. The BLS's Job Openings and Labor Turnover Survey, for example, showed that employers were starting to slow the pace of hiring, with less than 10 million active job openings by the end of February for the first time in nearly two years.

The payroll company ADP also released its national employment report in March, which showed that private employers added 145,000 jobs, down from the 261,000 jobs added in February.

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