The U.S. labor force held relatively steady in March, with unemployment sticking near a 50-year low, according to a report released Friday by the Bureau of Labor Statistics.
Non-farm employers added 236,000 jobs in March, a slower pace than in recent months but almost precisely as expected, while the unemployment rate remained at 3.5 percent. The unemployment rate in February 2020—just before the pandemic kicked off in earnest in the United States—was also 3.5 percent. Unemployment for Black people fell to 5 percent, a record low.
The labor force participation rate, or the number of people in the labor force, was mostly unchanged, ticking up one-tenth of a percent to 62.6 percent. The leisure and hospitality sectors, which were some of the hardest-hit at the peak of the pandemic, added the most jobs in March as businesses begin to recover.
Crucially, hourly earnings also held fairly steady, with average wages increasing 0.3 percent in March, up just a little from an average of 0.2 percent in February. This is the lowest increase since the fourth quarter of 2019.
Harvard economics professor Jason Furman warned that “average hourly earnings are poorly measured and volatile,” but if the rate holds, it could be a sign that inflation is on its way out. Slower wage gains help keep businesses’ operating costs down, which means employers will be less likely to keep consumer prices high to offset in-house expenses.
Both the employment gains and the potential decrease in inflation are huge wins for President Joe Biden, who has been under fire since he took office for sky-high inflation and unemployment, due to first Covid-19 and then Russia’s invasion of Ukraine.
People have been jumpy about the economy lately, particularly after a string of high-profile bank failures, including Silicon Valley Bank’s. Economists have been warning that a recession is on the horizon—some even claim that “a recession is underway now”—and the Federal Reserve has kept up its relentless campaign of interest rate hikes, although it has decreased by how much.
But Friday’s jobs report is a good sign that a soft landing, when inflation is brought down without tipping the economy into a recession, could still be possible.