236,000 Jobs Added in March 2023

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The U.S. economy added 236,000 jobs in March, according to the U.S. Bureau of Labor Statistics, suggesting good and bad future trends, say CEI analysts.

Sean Higgins, CEI research fellow:

“Friday’s Labor Department report that the economy gained 236,000 jobs in March, putting the unemployment rate at 3.5 percent is evidence that the economy is beginning to cool. It is still a good time to be a worker hunting for a job, the current unemployment rate being only marginally above its historic low of 3.4 percent. Employers are still seeking to fill positions but their need isn’t as acute, having hired 800,000 in the first two months of the year.

“News reports of layoffs in the tech sector were more than offset by gains in leisure and hospitality and professional services. The labor force participation rate rose to 62.6 percent in March, up from 60.4 percent in the previous March, suggesting that those who’ve been holding out for better offers are abandoning that strategy. We’ve finally transitioned back out of the Covid-19 pandemic’s economy and back to the pre-pandemic ‘normal.’”

Ryan Young, CEI senior economist:

“It has been a year now since Federal Reserve began raising interest rates and unwinding its $5 trillion monetary stimulus. The conventional wisdom is that this would cause higher unemployment, but so far that hasn’t happened. Why? One reason is that the economy was in good shape heading into COVID, which has made it resilient not just against the pandemic but against Washington’s massive spending and regulatory overreaction to it. There is still no guarantee of a soft landing as inflation goes back to normal, but the overall economy is holding up surprisingly well.”

Joshua Bandoch, CEI research fellow:

“The uptick in the labor force participation rate for the second consecutive month is good news and likely the result of increasing economic uncertainty. Labor force participation at 62.6 percent has increased a total of 0.2 percentage points since January 2023, bringing well over 100,000 people back into the workforce. Rising interest rates, layoffs by big companies (with more to come), and the collapse of multiple banks have rightly increased Americans’ anxieties about their individual economic situations, as well as about the economy as a whole. This likely has prompted many people who were out of the workforce to reenter. With the number of job openings down by over 600,000 in February, this welcome trend might not continue.”