US Job Growth in Line with Expectations as Hiring Slows

Job growth in the US came in line with market expectations, as non-farm payrolls grew by 236,000 for March, compared to the Dow Jones estimate of 238,000. Unemployment ticked lower to 3.5% in response to an increase in labor force participation. This was a small change against expectations that it would hold at 3.6%

Average hourly earnings edged up 0.3%, pushing the 12-month increase to 4.2%, the lowest level since June 2021. The overall picture showed signs that the job market is in the early stages of a slowdown. Although close to what economists had expected, this month’s job total was the lowest monthly gain since December 2020 and comes amid efforts from the Federal Reserve to slow labor demand to cool inflation.

The leisure and hospitality sectors showed growth of 72,000 jobs, a slowdown from the 95,000 pace of the past six months. Government (47,000), professional and business services (39,000) and healthcare (34,000) also posted good increases while retail slowed by 15,000 positions.

For the past year, the Fed has been trying to open a historically tight labor market, boosting its benchmark borrowing rate by 4.75 percentage points, the quickest tightening cycle since the early 1980s.

The job gains came during a month in which the failures of Silicon Valley Bank and Signature Bank rocked the financial world. Economists expect the banking troubles to have repercussions on the labor market in coming months, even if no effects were apparent in this month’s job report.