US posts strong job growth in March

US economy created 236,000 new jobs in March according to the employment data released by the Labor Department. As a result, the unemployment rate has decreased to 3.5%, indicating a sustained tight job market that may prompt the Federal Reserve to raise interest rates next month. According to the study, February’s employment data were amended, and 326,000 jobs were added as opposed to the previously stated 311,000. Even though the exceptionally mild weather’s initial boost to hiring is starting to fade, experts had anticipated payrolls to increase to 239,000. To keep up with the rise of the working-age population, the economy must add about 100,000 jobs each month. March saw a rise in average hourly pay of 0.3%, bringing the annual wage growth down from February’s 4.6% to 4.2%.

NewsOTG gathered that the Fed officials will wait for inflation data later this month to assess the impact of their year-over-year policy changes because this figure is still too high to be consistent with the Fed’s 2% inflation target. long-term campaign to tighten monetary policy. The Fed last month increased its benchmark overnight interest rate by a quarter of a percentage point, but indicated it was on the verge of pausing further rate hikes in a nod to financial market stress. the Fed has hiked its policy rate by 475 basis points since last March from the near-zero level to the current level. the FedWatch tool from CME Group predicts the U.S. central bank will increase rates by another 25 basis points at the May 2-3 policy meeting.

Notwithstanding these advances, some analysts believe that payrolls will decline in the second half of the year, which would force the Fed to begin lowering interest rates in order to prevent a severe recession. Jerome Powell, the chairman of the Federal Reserve, has pushed back against this notion, claiming that while consumer confidence is still low, corporate pessimism is at recessionary levels. Also, as businesses react more to sluggish demand brought on by increased borrowing prices and stricter credit conditions, the labor market is anticipated to loosen up in the second quarter. Although the U.S. economy is still growing steadily overall and has a low unemployment rate, economists are keenly monitoring for any indications of potential recessionary forces.
In the upcoming months, the Federal Reserve’s monetary policy decisions will have a big impact on the financial markets and the economy.