US employers added a booming 431,000 jobs in March as tumbling COVID-19 cases more than offset growing concerns about soaring inflation and the war in Ukraine.
The unemployment rate fell from 3.8% to 3.6%, the Labor Department said Friday. That puts it just above the 50-year low of 3.5% that prevailed just before the pandemic upended the economy in March 2020.
Economists surveyed by Bloomberg had estimated that 440,000 jobs were added last month.
The economy has now added more than 400,000 jobs a month for 11 monthsthe longest such streak on record, Morgan Stanley noted in a report.
So far, the nation has recovered 20.4 million, or 93%, of the 22 million jobs lost early in the health crisis, leaving it 1.6 million jobs short of its pre-crisis level, a gap that could be closed by summer.
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Another positive: Payroll additions for January and February were revised up by a total of 92,000. The upgrades pushed January’s advance to 504,000 despite widespread omicron-related worker absences.
“The labor market still has strong positive momentum and is making rapid progress towards pre-pandemic health,” economist Rubeela Farooqi of High Frequency Economics wrote in a note to clients.
The drop in unemployment came even as the number of people working or looking for jobs grew by 418,000, pushing the labor force participation rate from 62.3% to 62.4%, the highest since March 2020. More people who had been fearful of COVID or caring for children, among others, are returning to a favorable labor market with rising wages.
The number of people who couldn’t look for work because of the pandemic fell to 874,000 from 1.2 million in February, Labor said,
Last month, leisure and hospitality, which includes restaurants and bars, the sector hit hardest by the pandemic, led to job gains with 112,000; professional and business services added 102,000; retail, 49,000; manufacturing, 38,000; and construction, 19,000.
Several forces appeared to set the stage for more robust gains in March. Persistent worker shortages likely spurred companies to pull forward their normal spring hiring sprees to get a jump on the competition, says Goldman Sachs economist Spencer Hill.
And new COVID cases have plunged from more than 1 million a day as omicron raged in January to less than 30,000 daily. That’s encouraging more Americans to dine out and travel. It’s also prodding people on the sidelines, to return to a worker-friendly labor market with near-record job openings and sharply rising wages.
At the same time, inflation that hit new 40-year highs each of the last several months – particularly soaring gasoline prices – have dampened business confidence. In February, a measure of small business optimism fell to the lowest level in more than a year, according to the National Federation of Independent Business.
Some manufacturing workers are switching jobs as they seek shorter commutes to cope with high pump prices, says Peter Quigley, CEO of Kelly Services, a staffing firm.
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“We expect job creation will settle into a slower pace later this year as the economy feels the pinch from soaring inflation and tighter financial conditions,” economist Lydia Boussour wrote in a note to clients.
The Ukraine war and the market volatility it has triggered also “might have temporarily hit hiring plans,” says economist Andrew Hunter of Capital Economics.
But Tom Gimbel, CEO of LaSalle Network, a staffing firm, says “more CEOs and CFOs are concerned about inflation” rather than the war.
The number of small businesses open, as well as the numbers of employees working and hours they worked all will dipped in March, though they’re still up sharply from January, according to Homebase, which provides payroll software to small firms.
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George is Digismak’s reported cum editor with 13 years of experience in Journalism