The economy added 236,000 jobs in March, according to the latest data released by the Bureau of Labor Statistics (BLS). This growth was led by jobs in hospitality, government, professional and business services, as well as health care.
The unemployment rate hit 3.5% in March, similar to February's unemployment rate of 3.6%. The number of unemployed people was also relatively unchanged at 5.8 million in March, down from 5.9 million in February, the BLS reported. Both figures have seen "little net movement since early 2022," according to the BLS. In addition, average hourly wages increased 4.2% year-over-year.
"The increase in employment is concentrated in just a few sectors, with the largest gains in leisure and hospitality, where the level of employment remains 2.2% below its pre-pandemic peak," Mortgage Bankers Association (MBA) Chief Economist Mike Fratantoni said. "The question becomes whether consumers will continue to spend on meals out and travel as the economy slows. If not, job gains in this sector may also begin to slow."
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GAS PRICES INCREASE AS OPEC CUTS OIL PRODUCTION
Despite evidence of job growth and a strong labor market, inflation has continued to eat away at Americans’ wallets. In fact, rising costs was the top stressor for 74% of workers around the world, according to an analysis by Fidelity Investments.
In addition, 70% of Americans said inflation has impacted their finances to a greater extent than the COVID-19 pandemic, according to a survey by Real Estate Witch.
To combat inflation, the Fed increased interest rates by 25 basis points in February, despite recent turmoil in the banking sector. It's unclear if the Fed will raise interest rates again at its next meeting.
"Since our previous FOMC meeting, economic indicators have generally come in stronger than expected, demonstrating greater momentum in economic activity and inflation," Federal Reserve Chair Jerome Powell told reporters at a press conference in March. "We believe, however, that events in the banking system over the past two weeks are likely to result in tighter credit conditions for households and businesses, which would in turn affect economic outcomes."
One expert has predicted the Fed will still face challenges as it works to lower inflation.
"The March jobs report confirms that while progress continues on the inflation front, there is more work to be done," Curt Long, the chief economist and vice president of research at the National Association of Federally-Insured Credit Unions (NAFCU) said. "Job growth decelerated and labor force participation ticked up, both of which point to easing labor market tensions. However, hiring continues at a solid pace and there is no sign of the labor market slack that the Federal Reserve believes is needed to dent inflation."
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Despite reports of job growth over the past few months, many Americans fear a recession is near, according to Real Estate Witch.
"Three-fourths of Americans (74%) believe we’re experiencing a recession," Real Estate Witch said in its report. "At the same time, 1 in 20 (6%) say they’ll never be able to pay off their current debts. If over half the country thinks we’re also in a pandemic, one could argue that we are an extremely stressed-out nation."
Recession fears have also been spreading among experts. Bank of America and First National Bank of Omaha (FNBO) predicted a recession for 2023. Fannie Mae’s Economic and Strategic Research (ESR) Group said it expects a recession to emerge in the second half of 2023, following the recent bank failures.
"Recent events may act as the catalyst that tips an already precarious economy into recession, primarily via the combination of tighter lending standards among small and midsized regional banks and weakened business and consumer confidence," the ESR Group said in a statement.
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