The Employment Situation for March 2023

Editor's Note: This report is based on survey data from February 2023 that was published in March 2023. This is the most recent data available. (Source: Bureau of Labor Statistics)

‍

US employers added 311 thousand jobs last month, beating expectations yet again and clearing the predicted 225 thousand by a massive 38%. 

‍

This performance is especially noteworthy immediately following the unseasonably strong more than 500 thousand jobs added the month before.

‍

Despite these job additions, the unemployment rate did tick back up slightly to 3.6%, which isn’t particularly surprising given the fact that last month was the first time the reported unemployment rate had dropped below 3.5% in half a century. 

‍

Beyond the outsized job growth, the report is largely a reflection of stability, although in line with the unemployment uptick there was an increase in the number of job losers and temp workers whose jobs were completed last month, which increased by about 225 thousand.

‍

The survey also captured about 343 thousand additional people who had been jobless less than 5 weeks at the time of the survey, which is a more than 15% increase from the month before.

‍

In terms of newly added jobs, the leisure and hospitality industry saw the biggest gains last month with 105 thousand new additions to its payrolls, almost 70% of which were in restaurants and bars.

‍

The retail, government, and professional/business services industries each added about 50 thousand jobs, while the construction industry and the social assistance industry grew by 24 thousand workers and 19 thousand workers, respectively.

‍

Not all industries were so prosperous last month, however, with a net loss of 25 thousand jobs in the information sector, many of which have been fairly widely publicized, and a net loss of 22 thousand jobs in transportation and warehousing, as well.

‍

There was no noteworthy change last month in the job numbers for the mining, oil and gas extraction, manufacturing, wholesale, financial activities, and other services industries.

‍

Hourly earnings climbed by 8 cents to $33.09 on average, which is a 0.2% increase, though for employees in non-supervisory roles that rate was slightly higher at 0.5%, bringing their average hourly pay up 13 cents to $28.42.

‍

And as a further sign of the tightness of the labor market, the length of the average work week fell by 0.1% to 35.4 hours, and that drop was double for non-supervisory employees, with a 0.2% reduction in their average work week, bringing that figure to 33.9 hours per week.

‍

Mployer Advisor’s Take

‍

Though the number of jobs added has once again outperformed the forecasts, one area that didn’t quite meet expectations was the wage growth figure, which rose by 0.2% as opposed to the forecast 0.3% increase.

‍

While higher wages tend to be a net positive from the worker side of the equation, of course, given the Federal Reserve’s inclination toward swiftly and steeply hiking interest rates that we’ve witnessed over the past year plus, perhaps slowing wage growth will ultimately have a net positive effect for both employees and employers alike. 

‍

Despite the fact that slowing wage growth, cooling inflation, and upticking unemployment are all factors that the Fed is looking at to help guide its next moves and would seem to indicate less drastic measures may be in order with the economy generally moving in the direction that the Fed has been steering toward, some economists have taken recent statements from Fed Chairman Jerome Powell to indicate that the next rate hike in a couple weeks may be even steeper than the previous hikes had been.

‍

In any case, whether the Fed’s next meeting a little later this month produces a 0.25% or a 0.50% rate increase, the rate is almost certainly going to continue climbing in the short term given just how strong the job market remains coupled with the Fed’s belief that a weaker market is necessary to prevent excessive inflation from flaring back up again. 

Eager for more exclusive content? Check out the Mployer Advisor blog, or review last month’s employment numbers here.