In March, the US jobs boom showed signs of slowing, with employers adding 236,000 jobs, slightly lower than in February but meeting expectations, according to the Labor Department. Despite this, the unemployment rate remained low at 3.5%, near historic lows. The data comes as the US central bank continues to raise interest rates in an effort to stabilize rising prices. The tightening of borrowing costs could potentially impact job creation and lead to job cuts in some sectors.
However, the US labor market has defied expectations of a slowdown so far, with over 330,000 jobs added monthly on average in the past six months. Nonetheless, the latest report from the Labor Department showed declines in jobs in the construction, manufacturing, and retail sectors, indicating a possible shift in employment conditions. Wage increases also eased, with average hourly earnings rising by 4.2% over the year to March, the lowest since mid-2021.
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Some big companies, including Accenture, Disney, and Mc donald’s, have announced job cuts recently, but sectors such as bars, restaurants, schools, and hospitals have continued to add workers. The Federal Reserve has been raising interest rates to combat inflation, which reached 6% in February, above the target of 2%. Despite pressure from politicians and concerns about a potential recession, Federal Reserve Chairman Jerome Powell remains hopeful for a “soft landing” for the economy. However, some economists predict that unemployment may rise in the coming months due to tighter credit conditions.
