U.S. employers added 431,000 jobs in March as tumbling COVID-19 cases more than offset growing concerns about soaring inflation and the war in Ukraine.
The unemployment rate fell from 3.8% to 3.6%, the Labor Department said Friday.
Economists surveyed by Bloomberg had estimated that 440,000 jobs were added last month.
The economy remarkably has now added more than 400,000 jobs a month for 11 months, the longest such streak on record, Morgan Stanley noted in a report.
So far, the nation has recovered 20.4 million million, or 93%, of the 22 million jobs lost early in the pandemic, leaving it 1.6 million jobs short of its pre-crisis level, a gap that could be closed by summer.
Several forces appeared to set the stage for more booming gains in March. Persistent worker shortages likely spurred companies to pull forward their normal spring hiring sprees to get a jump on the competition, says Goldman Sachs economist Spencer Hill.
And after the omicron-fueled spike in COVID cases increased short-term unemployment by more than 400,000 workers in January, only about 70% of that surge reversed in February. That left room for additional rehiring last month, Hill says.
Overall, new COVID cases have plunged from more than 1 million a day as omicron raged in January to less than 30,000 daily. That’s encouraging more Americans to dine out and travel. It’s also prodding people fearful of the virus or caring for children, as well as some early retirees, to return to a worker-friendly labor market with near-record job openings and sharply rising wages.
At the same time, inflation that hit new 40-year highs each of the last several months – particularly soaring gasoline prices – have dampened business confidence. In February, a measure of small business optimism fell to the lowest level in more than a year, according to the National Federation of Independent Business.
Some manufacturing workers are switching jobs as they seek shorter commutes to cope with high pump prices, says Peter Quigley, CEO of Kelly Services, a staffing firm.
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“We expect job creation will settle into a slower pace later this year as the economy feels the pinch from soaring inflation and tighter financial conditions,” economist Lydia Boussour wrote in a note to clients.
The Ukraine war and the market volatility it has triggered also “might have temporarily hit hiring plans,” says economist Andrew Hunter of Capital Economics.
But Tom Gimbel, CEO of LaSalle Network, a staffing firm, says “more CEOs and CFOs are concerned about inflation” rather than the war.
The number of small businesses open, as well as the numbers of employees working and hours they worked all will dipped in March, though they’re still up sharply from January, according Homebase, which provides payroll software to small firms.
*story by USA Today