The U.S economy added 236,000 jobs in March – better than expected – and the unemployment rate edged down to 3.5%, according to the U.S. Bureau of Labor Statistics.
As of the end of the month, roughly 5.8 million people were unemployed – basically flat compared with February.
The labor force participation edged up slightly to 62.6%. Most of the gains were in leisure and hospitality, which added about 72,000 jobs.
Government jobs increased by 47,000 – and professional and business services added about 39,000. In addition, the healthcare sector added about 34,000 jobs.
Wages continued to increase slowly: The average hourly rate for all employees on private non-farm payrolls rose by 9 cents, or 0.3% to $33.18.
Over the past 12 months, average hourly earnings have increased by 4.2% – a far slower pace in comparison with inflation.
The average hourly rate for private-sector production and nonsupervisory employees rose by 9 cents, or 0.3%, to $28.50.
“In a snapshot, job gains in March are strong but slowing, labor supply as measured by overall labor force participation hit a post-Covid high, the unemployment rate moved down, and annual wage growth slowed,” says Odesa Kushi, deputy chief economist for First American, in a statement. “The labor market has shown remarkable resiliency and strength in the fact of restrictive monetary policy. Signs of a slowdown have emerged, but a very gradual one.”
Kushi notes that employment in the residential construction sector is yet to be “negatively impacted by the Federal Reserve’s monetary tightening.”
“The jobs openings rate in construction picked up to 4.9 percent, down from a series high of 5.8 percent in December 2022, but still strong,” Kushi says. “The ratio of construction hires per job opening fell in February and remains well below pre-pandemic levels, indicating it’s more difficult to hire.”
“In the March jobs report, residential building construction employment is up 2.3 percent year over year, while non-residential picked up by 4.2 percent,” she adds. “Residential building construction employment is up 11.6 percent compared with pre-pandemic levels, while non-residential building is up approximately 1 percent.”
Still, the pace of home construction is expected to slow.
“The annual pace of growth in residential building construction employment was the slowest since February 2021,” Kushi says. “It’s likely that the labor market will slow further alongside the slowdown in homebuilding and a weaker housing market.”