Surging inflation, high gas prices and the war in Ukraine has made Americans more pessimistic, but the hottest labor market in decades shows the U.S. economy is still booming.
The U.S. added 431,000 new jobs in March and the unemployment rate fell to 3.6%, reflecting widespread hiring and an increasing number of people willing to rejoin the labor force.
Businesses have a record number of open jobs and are eager to hire because demand for their goods and services are so high.
The highlights of the March jobs report underscore just how strong the labor market is:
The decline in the unemployment rate put it just a tick above the 3.5% level that prevailed before the pandemic. The last time the jobless rate was even lower was in 1969.
Hourly wages for American workers rose sharply again, pushing the increase over the past year to a whopping 5.6%. That’s the biggest gain since the early 1980s, excluding a brief period early in the pandemic.
Wages began to rise well before a surge in inflation because there’s so much competition for workers.
The percentage of people working or looking for work rose a tick to a pandemic high of 62.3%. Although about 1.5 million people are still missing from the economy compared to before the crisis, the gap is likely to be erased by summer at the current rate of rapid hiring.
The number of unemployed workers slid under 6 million for the first time since the pandemic began and moved closer to a a 22-year low.
The number of people who could only find part-time work fell slightly to 1.06 million, keeping it at a 21-year low.
The unemployment rate for Black Americans declined to a pandemic low of 6.2%. Before the pandemic, the jobless rate had fallen to the lowest level on record at 5.4%.
The number of “job losers” dropped below 3 million for the first time since February 2020 — the last month before the onset of the pandemic.
Other measures show layoffs have fallen to historic lows in light of the worst labor shortage in decades. Most businesses are loathe to lay people for fear they won’t be able to find replacements.
The unemployment rate for workers in their prime — ages 25 to 54 — edged down to 3% and returned to pre-pandemic levels.
The last time it was lower, excluding a brief 2.9% reading in May 2019, was in 1973.
“Robust job and earnings growth should alleviate concerns from some quarters that the economy is set to tip into recession,” said Richard Moody, chief economist at Regions Financial.