The Bureau of Labor Statistics has released its monthly Employment Situation Summary for the month of March, and it showed strong continuing growth in jobs, with 431,000 added as the COVID-19 pandemic continues to recede. This, in turn, has led to a drop in unemployment, bringing it from 3.8% to 3.5%, just above its record lows before the pandemic hit.
This continues the streak of the economy, adding more than 400,000 jobs a month for the 11th consecutive month. This has allowed the economy to regain 20.4 million of the 22 million lost early in the pandemic. The report has also indicated that the number of individuals returning to the labor market has also increased, which is a welcome development as many employers continue to struggle with staffing shortages.
The number of individuals employed or actively seeking employment increased by 418,000, increasing the labor force participation rate to 62.4%. The number of individuals not in the labor force due to the pandemic declined from 1.2 million in February to only 874,000 in March.
Of the workers returning to the labor force, the majority came from women reentering the workforce, with 300,000 entering in the month of March.
However, the number of women 16 and older participating in the labor force remains below pre-pandemic levels. Learn More
Retirees have also continued to return to the workforce, with the number of retired workers reentering the workforce increasing to approximately 3% of all retirees.
Among the industries that led the job growth in March, the leisure and hospitality sector reported the biggest gains with an increase of 112,000. The other sectors reporting the highest job gains included:
According to economists, these promising figures could strengthen the potential for the Federal Reserve to make a half percentage point hike to interest rates in the upcoming months in order to curb inflation which has reached record highs over the past few months. This and rising gas prices could prove to be a dampening factor on business growth in the coming months.
Despite this, the report appears to show the economy is continuing to strongly recover, and the expanding labor force has slowed the growth of wages over the previous two months. In addition to rising interest rates, this could reduce the pressure of inflation which has been plaguing the economy over recent months.
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