America Created 236,000 Jobs in March, Unemployment Falls to 3.5%

The U.S. economy added 236,000 jobs in March and the unemployment rate fell to 3.5 percent, the Labor Department said Friday.

Economists had expected the economy to add 230,000 jobs and the unemployment rate to hold steady at the 3.6 percent reported last month. The range of forecasts by economists surveyed by Econoday was between a gain on payrolls of 155,000 to 275,000, a rather wide range that suggests a higher level of uncertainty. On unemployment, the range of forecasts was 3.5 percent to 3.7 percent.

Despite the consensus among forecasters for 230,000 jobs, many traders on Wall Street were expecting a weaker report that would support a pause by the Federal Reserve when it meets next month. The turmoil in the banking sector following the collapse of Silicon Valley Bank in mid-March does not seem to have weighed on employment in the broader economy.

The Labor Department’s Job Opening and Labor Turnover Survey, knowns as Jolts, showed that there were 9.931 million job openings at the end of February, down from 10.5643 million a month earlier. Jobless claims for the week that ended last Wednesday came in at 228,000, above the consensus expectation for 201,000, and claims going back through the beginning of the year were revised up significantly, indicating more layoffs than previous estimates had suggested.

The Federal Reserve’s monetary policy panel meets in the first week of May, so this is the final report on job creation and unemployment it will receive prior to the meeting. Markets are currently split on whether the Fed continues to raise rates at that meeting or pauses. Projections of Fed officials released at the last meeting indicated that nearly all expect to raise their benchmark rate at least one more time and several expect to raise rates even further.

The labor force participation rate ticked up to 62.6 percent, up from 62.5 percent a month ago. Average hourly earnings were up 0.3 percent compared with a month earlier, an acceleration from 0.2 percent in February. Compared with a year ago, average hourly earnings are up 4.2 percent.