Slower Job Growth, Flat Jobless Rate and Weaker Wage Gains In March

Brian Turner
07 Apr, 2023
New York City

March nonfarm payroll employment report provided another confirmation of cooling but tight labor market conditions.

U.S. economy added jobs at a slower pace in March, but still above the long-term monthly average of 190,000, suggesting the jobs market is growing at a healthy pace.

Nonfarm payroll employment report offered another signal to policymakers after two private surveys on private sector job additions and job cuts announcements showed similar cooling trends in the labor market.  

Earlier in the week, another report from the  government showed available jobs declined to a 2-year low.  

The U.S. economy created 236,000 net new jobs as employers slow hiring amid rising costs and interest rates, the U.S. Bureau of Labor Statistics reported Friday. 

The unemployment rate declined to 3.5% from 3.6% in February. 

The unusually mild weather and seasonal factors drove hiring in the first two months but job market growth has been slowing after the surge in January and February. 

Both the unemployment rate, at 3.5%, and the number of unemployed persons, at  5.8 million, changed little in March. 

These measures have shown little net movement  since early 2022.

U.S. economy added downwardly revised 472,000 new jobs in January and upwardly revised 326,000 in February, significantly higher than the long-term monthly average of less than 190,000. 

The recent trends of job additions linked to travel and hospitality and health care sectors were visible in March. 

Leisure and hospitality added 72,000 jobs,  government  expanded payrolls 47,000, professional and business services increased 39,000 and health care added 34,000.

However, retail trade shrank the labor force by 15,000. 

Average hourly earnings rose 0.3% in March to $33.18 and increased 4.2% on an annual basis but the increase dropped to the lowest level since June 2021. 

The labor force participation rate inched higher to 62.6% and employment to population ratio rose to 60.4% in March but stayed below the pre-pandemic February 2020 level of 63.3% and 61.1% respectively.   

The total nonfarm payroll employment for January was downwardly revised by 32,000, from 504,000 to 472,000, and the February employment was revised up by  15,000, from 311,000 to 326,000. 

After these revisions, employment in January and February combined is 17,000 lower than previously estimated.