Only 236,000 jobs were added to the labor market by U.S. employers in the March of 2023. The number of jobs posted was much below the expected figure and hints that the labor market will face a gradual weakening in light of the interest rate issued by the Federal Reserve.
The rate hikes will serve a whole year as an attempt to reduce the impacts of inflation.
Experts were expecting that there would be at least 239,000 job postings and the expected unemployment rate will be 3.6 percent. In comparison to the job postings estimation and the job postings, this is the first time that the job postings had gone below the expected digits.
According to a report released by the Bureau of Labor Statistics, the unemployment rate has dropped to 3.5 percent. This comes just above the unemployment rate of January which was 3.4 percent.
However, this could not be considered progress because the unemployment rate of January was a record low one, the lowest one in the past 53 years. The same report hinted at the possibility of inflationary pressures easing down which will cause the Fed to pause its rate hikes.
When analyzing the statistics from the past 12 months the labor market has had a net gain of more than 4.1 million jobs. In this 345,417 jobs were gained per month which made the unemployment rate drop below unlikely the ones in recent decades.
Another report suggests that approximately 480,000 Americans started job hunting in March. This comes as a relaxation to the employers because the more the demand for the job is the less the demand to raise wages. This will ultimately result in chilling the pressures of inflation.
The federal government also released a similar report on Friday that contained the details about the job estimates. As per the report, the estimated job growth for the months of January and February has been revised down. The combined revised estimate was 17,000.
Read further to know the opinions of various companies and experts on this.
Sinem Buber an economist from ZipRecruiter said that the labor market will continue to soften. Buber added that the labor market should focus to reduce inflationary pressures in the upcoming months. This in turn would make the Federal Reserve a backup support when it comes to the inflation outlook.
Daniel Zhao, the Chief Economist at Glassdoor stated that the labor market in March came in like a lion with a banking crisis and more layoffs, and was going out like a lamb with a solid jobs report. He added that the labor market was still strong, but it was gliding slowly back down to Earth.
Clark Twiddy who owns Twiddy & Co said that there was no algorithm that cleans up a bathroom or a kitchen. He added that it causes people to pay more which will cause people to train more and engage more.
Twiddy has 175 full-time employees and all of them were offered flexible work-at-home schedules and staff group trips to Nashville and Las Vegas.
It is expected that by the fiscal year of 2026, Twiddy and Co will have roughly two-thirds of its stores to be operated by automation along with a majority of items that are processed in its own warehouses. These will be then moved to the automated facilities.
The Fed Reserve began to raise its benchmark rate from zero only in March 2022.
The Labor Department said that it had made adjustments in the way it calculates the number of Americans who file for unemployment benefits. A factor that contributed to an easing down of inflation was the raise of borrowing costs.
The recently published year-over-year consumer inflation rate was 6 percent. It was still below the 9.1 percent consumer inflation rate that was published the last June.
The new measure adopted by Labor Department has added more than 100,000 claims to its figures considering the past two weeks, It will be serving as an explanation for the reason for heavy layoffs in the tech industry this year. This was another reason that triggered the unemployment rates.
Average hourly earnings have reached 0.3 percent from the previous month and a slight growth from the 0.2 percent that was in February. On a yearly basis, the earnings increases have been moderated to 4.2 percent from 4.6 percent the month before.
In the last February, the labor force participation rate of the workers in the age group of 25 and 54 crossed the pre-pandemic levels by hitting 83.2 percent.
Also in the last month, the overall labor force participation rate continued to grow upward. It increased to 62.6 percent. It matched the pandemic-era high. Although it was still below the 63.3 percent rate of February 2020.