Economy adds 431K jobs in March, unemployment down to 3.6 percent

The U.S. added 431,000 jobs and the unemployment rate dropped to 3.6 percent in March, according to data released Friday by the Labor Department.

Job growth fell slightly short of expectations, as consensus estimates from economists projected a gain of roughly 490,000 jobs in March and a decline in the jobless rate to 3.7 percent.

But resilient consumer spending and historically strong demand for workers helped power the U.S. economy to another steady job gain.

The Labor Department also revised the January and February job gains up by a combined 95,000, bringing the total of jobs added by the U.S. economy in 2022 to 1,685,000 million.

“The March jobs report is another strong report,” said Gordon Gray, director of fiscal policy at the American Action Forum, a right-leaning think tank. “Paired with another significant decline in the unemployment rate, as well as an uptick in the labor force, the labor market in March was undeniably strong.”

More Americans who left the workforce during the pandemic appeared to be returning to the job hunt in March, a promising sign as businesses struggle to fill a record number of openings. The labor force participation rate ticked higher to 62.4 percent and the employment-population ratio — the proportion of working-age adults in the labor force — rose to 60.1 percent.

Wage growth also accelerated in March, with average hourly earnings rising 5.6 percent over the past 12 months, up from 5.1 percent in February. 

The wage growth comes as inflation batters the Biden administration and Democrats politically, contributing to the president's approval ratings being stuck in the low 40s. This has contributed to the anxiety in his party in a midterm election year, as Democrats are worried they could lose both the House and Senate majorities in this fall's elections.

Gas prices have risen further with the Russian war in Ukraine and the international sanctions on Moscow. President Biden on Thursday announced he would be releasing 1 million barrels of oil a day from the nation's strategic reserves to try to offer some help to lower gas prices.

The administration has touted the strength of the job market and the overall economy in the face of attacks from Republicans on inflation. And the March report offered more good news.

Overall, job seekers continued to enjoy ample opportunities to find work at businesses across the economy even in the face of the highest annual inflation in 40 years. And businesses hit hardest by the pandemic-driven recession were among the top job gainers in March.

The leisure and hospitality industry added 112,000 jobs in March, with restaurants and bars adding 61,000 jobs and accommodation businesses adding 25,000. Employment in the sector is still down 1.5 million from the onset of the pandemic.

Professional and business services companies gained 102,000 jobs in March and retailers added 49,000 employees, pushing both sectors well above their pre-pandemic employment levels.

The manufacturing, construction and financial sectors also saw strong jobs gains last month.

The strong March job haul is the latest in a string of stellar employment reports. The U.S. has gained an average of 562,000 jobs each month in 2022 — the same rate as in 2021, when the country added a record-breaking 6.8 million jobs

Even so, steady monthly job growth has done little to bolster Biden’s approval ratings and voters’ views about his handling of the economy. While job growth, consumer spending, the stock market and property values rebounded rapidly from the recession, a 7.9 percent annual increase in prices has wiped out the political benefit of a strong economy otherwise.

"The coming months will be a test for the labor market with the Federal Reserve starting to hike rates, the war in Ukraine disrupting global supply chains, inflation continuing to surge and the stimulus of fiscal relief fading," wrote Daniel Zhao, senior economist at Glassdoor.

"Today's report adds confidence that we're still experiencing a hot labor market with a healthy buffer to fight any headwinds, but the last two years have demonstrated that we can't rule out any surprise curveballs," he wrote,

Updated at 10:50 a.m.