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(Wallace Refiners) – The U.S. labor market continues to surge higher as the U.S. economic recovery from the COVID-19 shifts into a higher gear.
Friday, the Bureau of Labor Statistics said 916,000 jobs were created in March. The data significantly beat expectations as economists were expecting to see job gains of around 652,000.
The U.S. economy is seeing its best job growth since September.
Along with the strong headline numbers, the report said that the unemployment rate dropped to 6.0%, down from January’s reading of 6.2% and in line with expectations.
There has been little market reaction to the latest employment data as most markets are closed for the Easter long weekend. According to some market analysts, the latest employment data is providing some momentum for the U.S. dollar, which would be gold negative.
Not only did March’s employment data beat expectations, but the report noted substantial upward revisions in January and February. January’s employment numbers were revised up to 233,000 from the previous estimate of 166,000; meanwhile, February’s employment numbers were revised up to 468,000, compared to the initial estimate of 379,000.
“With these revisions, employment in January and February combined was 156,000 higher than previously reported,” the report said.
However, it’s not all good news for the U.S. labor market as wages dropped last month. The report said that average hourly wages fell by 0.1% or 4 cents to $29.96. Economists were expecting to see a 0.1% gain.
While wage inflation remains muted, some economists note that tame price pressures will continue to support the Federal Reserve’s ultra-accommodative monetary policies.
Although the labor market continues to improve after last year’s massive devastation, many economists note that there is still a long way to go before the U.S. economy reached full employment.
“Even after today’s strong gain, however, payrolls remain 8.4 million (or 5.5%) below their pre-pandemic peak, with big holes still to fill in the hardest-hit services areas,” said Andrew Grantham, senior economist at CIBC.
“Looking forward, we would expect to see further strong job gains in the months ahead, particularly as people start to feel more confident spending their stimulus dollars on services such as travel and restaurants. However, that is, of course, dependent on vaccinations continuing at speed and those vaccinations being able to prevent serious illness from new variants,” he added.
U.S. economy created 916,000 jobs in March, significantly beating expectations.
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