![US labor market gradually cools in March – odds of rate hike increase.Goodness99 US labor market gradually cools in March – odds of rate hike increase.Goodness99](https://goodness99.online/wp-content/uploads/2023/04/0305_638166861749745810.png)
Numbers continue to head in the right direction for Fed as hopes continue for a ‘Goldilocks’ outcome
Insurance News
The US labor market experienced a gradual slowdown in March as employers added 236,000 workers, but the bump was enough to continue downward pressure on the unemployment rate, bringing it down to 3.5%.
This follows a year of robust growth after the Federal Reserve aggressively raised interest rates to combat high inflation. Throughout January and February 2023, approximately 800,000 jobs were added, with the unemployment rate remaining at historic lows.
These latest figures followed the trend set by the JOLT numbers earlier this week, which are released by the US Bureau of Labor Statistics to show job openings.
In March, the leisure and hospitality industry saw the largest job gains, adding 72,000 new workers. The temporary help services sector followed closely behind, contributing 65,000 new workers to the job market. The labor force participation rate increased slightly from 62.5% to 62.6% in March, while the average weekly hours worked decreased from 34.5 to 34.4.
Over the last six months, the US economy has averaged 334,000 new jobs per month.
However, weekly jobless claims, a measure of layoffs, have increased from historic lows, and job openings have decreased. This indicates a declining demand for workers as the labor market gradually cools. “The great labor market machine is finally slowing down some, but it’s still got a lot of strength left,” Robert Frick, corporate economist at Navy Federal Credit Union told the Wall Street Journal.
Employers in the leisure and hospitality sectors are actively hiring as they continue to recover from significant job losses during the early stages of the pandemic. Hospitals, nursing homes, and daycare centers are also looking to fill positions after many employees quit or retired.
As more people join the labor market, employers are finding it easier to hire workers, easing the pressure on wage growth, a factor contributing to high inflation.
The question now is, will the slow-down in hiring be fast enough to stop the Fed hiking rates, and slow enough to prevent a recession.
The latest job report has led to a shift in market expectations, with a 67% probability of the Federal Reserve increasing rates by 0.25% in May, up from a 50/50 chance before the report was released on Friday.
Release Date | Actual | Forecast |
---|---|---|
Apr 07, 2023 (Mar) | 236K | 239K |
Mar 10, 2023 (Feb) | 311K | 205K |
Feb 03, 2023 (Jan) | 517K | 185K |
Jan 06, 2023 (Dec) | 223K | 200K |
Dec 02, 2022 (Nov) | 263K | 200K |
Nov 04, 2022 (Oct) | 261K | 200K |
Oct 07, 2022 (Sep) | 263K | 250K |
Sep 02, 2022 (Aug) | 315K | 300K |
Aug 05, 2022 (Jul) | 528K | 250K |
Jul 08, 2022 (Jun) | 372K | 268K |
Jun 03, 2022 (May) | 390K | 325K |
May 06, 2022 (Apr) | 428K | 391K |
Apr 01, 2022 (Mar) | 431K | 490K |
Mar 04, 2022 (Feb) | 678K | 400K |
Feb 04, 2022 (Jan) | 467K | 150K |
Jan 07, 2022 (Dec) | 199K | 400K |
Dec 03, 2021 (Nov) | 210K | 550K |
Nov 05, 2021 (Oct) | 531K | 450K |
Oct 08, 2021 (Sep) | 194K | 500K |
Sep 03, 2021 (Aug) | 235K | 750K |
Aug 06, 2021 (Jul) | 943K | 870K |
Jul 02, 2021 (Jun) | 850K | 700K |
Jun 04, 2021 (May) | 559K | 650K |
May 07, 2021 (Apr) | 266K | 978K |
Apr 02, 2021 (Mar) | 916K | 647K |
Mar 05, 2021 (Feb) | 379K | 182K |
Feb 05, 2021 (Jan) | 49K | 50K |
Jan 08, 2021 (Dec) | -140K | 71K |
Dec 04, 2020 (Nov) | 245K | 469K |
Nov 06, 2020 (Oct) | 638K | 600K |