US labor market gradually cools in March – odds of rate hike increase.Goodness99

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

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