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The jobs boom in the US slowed last month but the unemployment rate remained low, as the world’s largest economy remained resilient in the face of sharply higher borrowing costs.
Employers added 236,000 jobs in March, close to expectations.
The number of new jobs created was below February but at 3.5%, the jobless rate remained near historic lows.
The data is being closely watched as the US central bank raises interest rates to stabilise soaring prices.
The US Federal Reserve has been lifting interest rates to cool the rate of price rises, otherwise known as inflation, since March last year.
US inflation rose by 6% in February after peaking at more than 9% last June.
As the rate of inflation has started to ease, Jerome Powell, chairman of the Federal Reserve, has faced pressure from politicians who say the bank is taking steps that will throw millions of people out of work.
Central banks in the US, the UK and Europe have been Increasing interest rates to bring inflation under control.
Raising rates makes borrowing more expensive. It means businesses borrow less, making them less likely to create jobs or even cut staff.
However, the US labour market has proven stubbornly resilient so far.
Employers have added more than 330,000 jobs monthly on average over the last six months and job openings have outstripped the workers available.
Analysts said the latest report from the US Labor Department suggested conditions may be starting to change, noting job declines in the construction, manufacturing and retail sectors.
The increase in wages also eased, with average hourly earnings rising by 4.2% over the year to March. This is below the 4.6% increase in February and the lowest since mid-2021.
“Overall, while the headline gain was a little stronger than we had expected, it’s still the smallest monthly gain since December 2020,” said Andrew Hunter, deputy chief US economist for Capital Economics.
Big companies including consultancy Accenture, entertainment giant Disney and fast food chain McDonalds have announced job cuts in recent weeks.
But schools and hospitals in the US have continued to add workers, raising hopes that the economy will slow and inflation subside without a painful recession.
“The bottom line is the labor market has a lot of momentum and today’s job numbers point to a continued resiliency in the economy, in the face of many, many, many uncertainties.” said Rose Khattar, economist at the left-leaning Center for American Progress.
While the rate of inflation has slowed, it remains above the Federal Reserve’s 2% target.
The Federal Reserve has raised interest rates nine times in the last year, including in March when the US banking sector was hit by its two biggest failures since the global financial crisis in 2008.
Commenting on last month’s increase, Mr Powell pointed to the strong jobs market and said he remained hopeful that officials could achieve a so-called “soft landing”. This means an economy avoids a recession or if there is a slowdown, it will be short-lived.
“I think that pathway still exists and, you know, we’re certainly trying to find it,” he said.
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