Employers in the world’s largest economy added 431,000 jobs last month, according to the Bureau of Labor Statistics, lower than the revised 750,000 jobs created in February and less than Bloomberg’s consensus forecast of 490,000 jobs. The unemployment rate was 3.6 percent, a drop of 0.2 percentage points from the level of February and the lowest level before the pandemic. The figures also showed a recovery in monthly wage growth following a surprising slowdown in February. Average hourly earnings recorded a monthly profit of 0.4 percent, which translates to an increase of 5.6 percent from the same period last year, as companies continue to compete for talent and rush to fill an almost record vacancy. For each unemployed there are about 1.7 openings. As wages have risen and concerns about the Covid-19 pandemic have receded, the proportion of Americans either employed or looking for work has risen, but remains hesitant from pre-pandemic levels. The deficit narrowed sharply in March, with the labor force participation rate rising by 0.1 percentage points to 62.4%. In February 2020, it stood at 63.4%. The yield on the two-year US bond, which is sensitive to monetary policy expectations, rose about 0.1 percentage point to 2.43 percent after payroll data, having previously risen 0.04 percentage points. Job data were collected as Russia’s war in Ukraine escalated sharply, causing prices for oil and other commodities to rise. Despite growing uncertainty and rising costs, the US job market remains extremely tight by historical standards. At a news conference in mid-March following the first rate hike since 2018, Jay Powell, chairman of the Federal Reserve, warned that the job market was “tight at an unhealthy level” and expressed concern about the possibility of higher wages in price pressures. . With inflation running at the fastest pace in 40 years, the US Federal Reserve has signaled its plans for a steady tightening of monetary policy after two years of highly encouraging regulation. Officials have expressed a clear willingness to increase the pace further and achieve at least a one-point rate hike this year – something it has not done since May 2000. Most policymakers expect interest rates to approach 2% by the end of the year from the current range of 0.25% to 0.50%, according to the latest forecasts, and eventually rise to 2.8% in 2023. This is above the average estimate of the “neutral” interest rate and suggests a policy stance that is beginning to restrict economic activity. Despite the stricter stipulation, members of the Federal Open Market Committee and other bank branch presidents do not believe that their efforts to curb inflation will lead to a sharp rise in unemployment or a recession. The bond market is flashing a possible warning sign for the US economy after the reversal of a widely monitored section of the yield curve this week, which tracks the difference between two-year and 10-year government yields.
