America added 431,000 jobs in March, taking the unemployment rate to a new pandemic low

(CNN) – The U.S. job market is booming, adding 431,000 more jobs in March and bringing the unemployment rate down to a new pandemic-era low of 3.6%, the Bureau of Labor Statistics.

Even though job gains fell short of economists’ expectations, they still delivered a strong first quarter for the US labor market with an average monthly gain of more than half a million jobs. March was the 15th consecutive month of robust job gains.

The economy is now just 1.6 million short of jobs than it was in February 2020, before the pandemic hit. This means the country is poised to rebound from the pandemic recession nearly eight years faster than it took to recover from the Great Recession.

Several labor market measures are already close to pre-Covid levels, the BLS said on Friday. This includes the total number of unemployed, which fell to 6 million in March, as well as the number of people who lost their permanent jobs, which fell to 1.4 million.

As things normalize and workers return to their offices, the number of people working remotely due to the pandemic has also declined, falling to 10% in March from 13% in February.

“Despite concerns about inflation and the Russian-Ukrainian war, American companies are still hiring at full capacity, while more and more people return to the labor market (including retirees), likely attracted by higher salaries. higher,” said Sal Guatieri, senior economist at BMO. , in a note to customers. “This is great news for the economy.”

US companies must raise wages to attract staff as job openings remain near record highs. The average hourly wage rose 13 cents to $31.73 in March. This puts the average increase over the past 12 months at 5.6%. While that would be phenomenal wage growth in normal times, high pandemic-era inflation pales in comparison. In February, the personal consumption expenditure price index rose 6.4% from the same period a year earlier, the fastest rise since January 1982.

Between the current labor shortage and rising prices for goods and services, wages are unlikely to fall anytime soon, “fanning the flames of inflation”, Guatieri said.

This means that the Federal Reserve, whose job it is to maintain price stability, will have to continue its series of monetary tightening measures. In March, the central bank raised interest rates by a quarter of a percentage point for the first time since 2018 to contain high prices. Market expectations for a bigger interest rate hike in May rose after Friday’s jobs data.

This is a developing story. It will be updated

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