US job growth remains strong in March

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The US economy continued to churn out jobs at a brisk pace last month, government data showed on Friday, in a sign of tightness in the labour market that could lead to the Federal Reserve raising interest rates again next month.

The unemployment rate fell to 3.5 per cent, not far above the 53-year low of 3.4 per cent set in January. Last month’s job growth was down from February’s gain of 326,000.

The US stock market was closed for Good Friday. Economists polled by Reuters had forecast payrolls rising by 239,000. Other estimates ranged from 150,000 to 342,000.

The economy needs to create about 100,000 jobs a month to keep up with growth in the working-age population. In a statement, President Joe Biden called Friday's job report a good one for "hard-working Americans". "But there is more work to do," he said.

"My administration is working each day to lower costs for families and to make our economy even stronger, now and for the long term, with investments in infrastructure, innovation and clean energy."

The latest numbers come days after separate reports showed private hiring and services activity easing while the manufacturing sector remained weak.

The labour market data is closely watched for its potential impact on future Federal Reserve interest rate decisions — but it is unclear if the latest figures are enough to translate into a pause in rate increases as the Fed fights inflation.

For Fed officials, taming inflation is the priority. They were slow to respond after consumer prices started surging in the spring of 2021, concluding that it was only a temporary consequence of supply bottlenecks caused by the economy’s surprising rebound from the pandemic recession.

Only in March last year did the Fed begin raising its benchmark rate from near zero. In the past year, though, it has raised rates more aggressively than it had since the 1980s to attack the worst bout of inflation since then.


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