The job market was far hotter than expected in March, as the Bureau of Labor Statistics reported 303,000 were added to non-farm payrolls last month – blowing past expectations of 200,000. The news prompted a surge in 10-year Treasury yields and general excitement along Wall Street.
January’s numbers were revised upward by 27,000, from new jobs 229,000 to 256,000. The jobs count for February was revised down by 5,000, from 275,000 to 270,000.
Despite the big news, the unemployment rate hovered around 3.8 percent. It’s been lingering in the 3.7 to 3.9 range for several months. However, the labor force participation rate dropped to 62.7 percent.
Here’s the overall breakdown from the BLS report:
Health care added 72,000 jobs in March, above the average monthly gain of 60,000 over the prior 12 months. In March, job growth continued in ambulatory health care services (+28,000), hospitals (+27,000), and nursing and residential care facilities (+18,000).
In March, employment in government increased by 71,000, higher than the average monthly gain of 54,000 over the prior 12 months. Over the month, employment increased in local government (+49,000) and federal government (+9,000).
Construction added 39,000 jobs in March, about double the average monthly gain of 19,000 over the prior 12 months. Over the month, employment increased in nonresidential specialty trade contractors (+16,000).
Employment in leisure and hospitality trended up in March (+49,000) and has returned to its pre-pandemic February 2020 level. Over the prior 12 months, job growth in the industry had averaged 37,000 per month.Employment in the other services industry continued its upward trend in March (+16,000). The industry had added an average of 8,000 jobs per month over the prior 12 months. Employment in other services remains below its February 2020 level by 40,000, or 0.7 percent.
Employment in social assistance continued to trend up in March (+9,000), below the average monthly gain of 22,000 over the prior 12 months.
The 10-year Treasury yield jumped 8 basis points because of the shocking news, moving up to 4.387 percent. The 2-year Treasury yield was also higher by 7 basis points, coming in at 4.711 percent.
“This is another really strong report,” Lauren Goodwin, economist and chief market strategist at New York Life Investments, told CNBC. “This report and the February report showed some broadening in terms of job creation, which is a very good sign.”
However, some of the data was not so positive.
In addition to the downward-revised February jobs numbers, black unemployment ticked upward by nearly a whole percentage point. It’s now at 6.4 percent, which is tied for the highest level since August 2022. Asian and Hispanic unemployment fell dramatically to 2.5 percent and 4.5 percent, respectively.
The markets have been keeping a wary eye on the jobs report because of how it might impact fiscal policy at the U.S. Federal Reserve. The interest rate is on hold while the Fed decides whether or not inflation is stable enough to begin reducing rates again. But those high interest rates have the market feeling more cautious than ever, and they are eager to see it drop.
If the job market and wages start running too hot, it may cause the Fed to hold off on reducing interest rates.
