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WASHINGTON — American employers added a solid 236,000 jobs in March, suggesting the economy remains on solid footing despite the Federal Reserve imposing nine interest rate hikes in the past year in its drive to tame inflation.
The unemployment rate fell to 3.5%, just above the 53-year low of 3.4% set in January.
At the same time, some details of Friday’s report from the Labor Department raised the possibility that inflationary pressures might be easing and the Fed might soon decide to pause its rate hikes. Average hourly wages were up 4.2% from 12 months earlier, down sharply from a 4.6% year-over-year increase in February.
Measured month to month, wages rose 0.3% from February to March, a tick up from a mild 0.2% gain from January to February. Still, that figure signaled a slowdown from average wage increases in the final months of 2022.
Last month’s job gain marked a moderation from the sizzling 326,000 added in February. The report revised down estimates of job growth in January and February by a combined 17,000.
“Today’s report is a Goldilocks report,” said Daniel Zhao, lead economist at Glassdoor. “It’s hard to find a way it could have been better. We do see that the job market is cooling, but it’s still resilient.”
A hiring sign is displayed Tuesday at a restaurant in Prospect Heights, Ill.
Employers tend to pass the cost of higher wages on to customers in the form of higher prices. A substantial 480,000 Americans began looking for work in March. Typically, the bigger the supply of job seekers, the less pressure employers feel to raise wages. The result can be an easing of inflation pressures.
The percentage of people who have a job or are looking for one — the so-called labor force participation rate — reached 62.6% in March, the highest level in three years. The share of working-age Americans — ages 25 to 54 — who have jobs rose to 80.7%, the highest point since 2001.
Last month’s job growth was led by the leisure and hospitality category, which added 72,000. In that sector’s industries, restaurants and bars gained 50,000.
State and local governments added 39,000, health care companies 34,000. But construction companies cut 9,000 jobs, that sector’s first such decline since January 2022. Factories reduced payrolls slightly for a second straight month, reflecting a slowdown in U.S. manufacturing.
Though unemployment remains higher for people of color than for white Americans, the unemployment rate for Black workers fell last month to 5% — the lowest jobless rate for Black Americans in government records dating to 1972.
Construction workers prepare a recently poured concrete foundation March 17 in Boston.
However, many employers still are struggling to fill positions.
In North Carolina’s Outer Banks, Clark Twiddy said his family company, which sells property and helps homeowners rent to vacationers, still faces what he calls “the tightest job market of anyone’s lifetime.”
Twiddy & Co. sharply raised entry-level pay for seasonal workers — it hires 500 to 600 a year — to $18-$20 an hour from $13-$14 in 2019.
Service companies like his, Twiddy said, have to treat employees as respectfully as they do customers, knowing that the best ones have ample job opportunities elsewhere.
“There’s no algorithm that cleans up a bathroom or a kitchen,” he said. “We have to pay more. We have to train more. We have to engage more.”
For his 175 full-time employees, Twiddy offers perks — from allowing flexible work-at-home schedules to taking the staff on group trips to Nashville and Las Vegas.
His business is booming, thanks to Americans’ pent-up demand to take vacations. Despite his higher costs, he said, “I’m making more money at what I’m doing than I’ve ever done.”
Employees work March 23 at a restaurant in Chicago.
More than two years of labor shortages have led some companies to turn to machines to try to improve efficiency. Walmart, the nation’s largest retailer and private employer, for example, embarked on a major push toward automation.
By the 2026 fiscal year, the company says it expects roughly two-thirds of its stores to be served by automation, with a majority of items that are processed through its warehouses to move through automated facilities. The change will involve robotic forklifts that unload goods from trailers instead of having workers do the manual work. Walmart said such moves will require roles that demand less physical labor yet could provide higher pay.
Despite last month’s healthy job growth, the latest economic signs suggest the economy is slowing, which would help cool inflation pressures. Manufacturing is weakening. America’s trade with the rest of the world is declining. And though restaurants, retailers and other services companies are still growing, they are doing so more slowly.
In March 2022, the Fed begin raising its benchmark rate from near zero. And as borrowing costs rose, inflation steadily eased. The latest year-over-year consumer inflation rate — 6% — is well below the 9.1% rate it reached last June. But it’s still considerably above the Fed’s 2% target.
The March numbers are the last jobs report the Fed will see before its next meeting May 2-3. But its policymakers will gain a clearer view of inflationary pressures next week, when the Labor Department issues reports on prices at the consumer and wholesale levels.
Some economists are holding out hope that the economy can avoid a recession despite the ever-higher borrowing rates.
Industries that laid off the most workers in January
Industries that laid off the most workers in January
Updated
World economies have been left in disarray after the COVID-19 pandemic shocked supply chains and deeply affected the global workforce. And the U.S. has been no exception.
As financial rescue efforts fade into the background, the U.S. economy is facing dual crises of stubbornly persistent inflation and uncertainty about a looming downturn stemming from central banks’ own prescription for combatting inflation—higher interest rates.
Companies spent 2022 pulling back on spending and new hires, moving forward cautiously. Nationwide, about 1.7 million people were laid off or fired in January 2023. That’s up about 16% from December 2022 and about 20% from January 2022.
Stacker used Bureau of Labor Statistics data to rank 19 major industries by the number of layoffs they had in January 2023. The analysis uses seasonally adjusted data. Numbers for the month are preliminary and may be updated.
#18. Mining and logging (tie)
Updated
– January 2023 layoffs: 5,000
— Change from prior month: No change
— Change from January 2022: -2,000
– January 2023 layoff rate: 0.8% (Rank: #11)
— Change from prior month: +0.1 percentage points
— Change from January 2022: -0.4 percentage points
The mining and logging industry includes oil and gas workers as well as workers who cut timber and produce wood for residential construction. The logging industry has faced an unseasonably warm winter in some parts of the U.S. as well as rising costs, which business leaders have cited as the reason for workforce cuts.
The salaries of oil and gas industry CEOs have climbed while they continue to cut their workforce, claiming to Congress at one point last year that record retail gas prices were a result of a labor shortage. The largest companies by market capitalization in the sector have enjoyed record profits in recent years and paid shareholders handsomely.
#18. Federal government (tie)
Updated
– January 2023 layoffs: 5,000
— Change from prior month: -5,000
— Change from January 2022: -2,000
– January 2023 layoff rate: 0.2% (Rank: #19)
— Change from prior month: -0.1 percentage points
— Change from January 2022: No change
The federal government represents around 6% of all jobs in the country including the military, the departments of labor, education, and justice, and other federal agencies—as well as the U.S. Postal Service. The size of the federal government’s payroll has “significantly” decreased over the last 50 years, according to the nonpartisan Brookings Institution.
#17. Finance and insurance
Updated
– January 2023 layoffs: 22,000
— Change from prior month: +3,000
— Change from January 2022: +1,000
– January 2023 layoff rate: 0.3% (Rank: #18)
— Change from prior month: No change
— Change from January 2022: No change
Finance and insurance companies enjoyed an employment boom in recent years, spurred by the onset of the pandemic. Americans cooped up in their apartments and houses leapt at the chance to secure larger homes for themselves at historically low interest rates. In today’s higher interest rate environment, these firms may find themselves poorly equipped to keep all of their workers on payroll. On the other hand, Americans have continued to borrow at surprising rates as inflation eats into their bottom lines.
#16. Educational services
Updated
– January 2023 layoffs: 28,000
— Change from prior month: -1,000
— Change from January 2022: +4,000
– January 2023 layoff rate: 0.7% (Rank: #12)
— Change from prior month: -0.1 percentage points
— Change from January 2022: +0.1 percentage points
The nation’s educational services industry comprises elementary and secondary school teachers as well college professors and nontraditional educators like online tutors. Colleges have struggled with a decline in overall enrollment since the onset of the COVID-19 pandemic, and some in the industry fear some institutions may downsize.
#15. Real estate and rental and leasing
Updated
– January 2023 layoffs: 31,000
— Change from prior month: +13,000
— Change from January 2022: +19,000
– January 2023 layoff rate: 1.3% (Rank: #6)
— Change from prior month: +0.5 percentage points
— Change from January 2022: +0.8 percentage points
The real estate industry was among the first to feel the effects of rising interest rates as the Federal Reserve began its attempts to control inflation in 2022. Thousands of real estate agents and brokers have lost their jobs since rates began increasing and inventory has remained squeezed.
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#14. Other services
Updated
– January 2023 layoffs: 41,000
— Change from prior month: No change
— Change from January 2022: -18,000
– January 2023 layoff rate: 0.7% (Rank: #12)
— Change from prior month: No change
— Change from January 2022: -0.4 percentage points
The so-called “other services” category of American industry includes service-oriented jobs that don’t fit neatly into any other category. It includes jobs like equipment repair, religious work, and end-of-life care, according to the Bureau of Labor Statistics.
#13. State and local government education
Updated
– January 2023 layoffs: 45,000
— Change from prior month: +8,000
— Change from January 2022: +13,000
– January 2023 layoff rate: 0.4% (Rank: #17)
— Change from prior month: No change
— Change from January 2022: +0.1 percentage points
Public school teachers are represented in the state and local government education sector, a field that has struggled to attract and retain teachers over the last decade as public school funding has dried up. Record inflation has made teaching wages close to unlivable in some places as conservative elected officials have slashed public education funding. Public schools may be forced to cut teachers in the event that costs rise to unmanageable levels.
#11. State and local government, excluding education (tie)
Updated
– January 2023 layoffs: 47,000
— Change from prior month: -3,000
— Change from January 2022: +12,000
– January 2023 layoff rate: 0.5% (Rank: #15)
— Change from prior month: No change
— Change from January 2022: +0.1 percentage points
State and local governments feared that the U.S. could face a shortfall of tax revenue when the COVID-19 pandemic began. Record federal rescue funds kept Americans spending, however, and put ample money back into some state tax coffers. Other states are just now feeling tax revenues bounce back, leading to proposals to pass the savings on to voters in the form of tax cuts in some places.
#11. Information (tie)
Updated
– January 2023 layoffs: 47,000
— Change from prior month: +1,000
— Change from January 2022: -14,000
– January 2023 layoff rate: 1.5% (Rank: #5)
— Change from prior month: No change
— Change from January 2022: -0.5 percentage points
The information industry includes those working in media, which took a haircut in 2022 as corporate media outlets cut their head counts, citing uncertainty about the future of the economy. Interest in media, and with it ad dollars, spiked during the Trump administration as Americans tuned into cable news and visited news websites to keep up with two impeachments and near-weekly scandals.
#10. Nondurable goods manufacturing
Updated
– January 2023 layoffs: 55,000
— Change from prior month: +11,000
— Change from January 2022: +7,000
– January 2023 layoff rate: 1.1% (Rank: #7)
— Change from prior month: +0.2 percentage points
— Change from January 2022: +0.1 percentage points
The phrase “nondurable goods” is a fancy way of saying any item you can purchase that will go bad if left on a shelf for too long, or will only provide the consumer with a single use before it’s gone. These items include food and cleaning products or even cigarettes. Americans working in nondurable goods manufacturing might work for a food processor like Frito-Lay or a makeup brand.
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#9. Durable goods manufacturing
Updated
– January 2023 layoffs: 57,000
— Change from prior month: +3,000
— Change from January 2022: -13,000
– January 2023 layoff rate: 0.7% (Rank: #12)
— Change from prior month: No change
— Change from January 2022: -0.2 percentage points
Durable goods include any item you purchase that gets reused over time and does not expire. These can be plastic storage bins, children’s toys, and even technology like smartphones. Manufacturing of durable goods saw a boom in the first two years of the pandemic as consumers spent their incomes on the only things they could safely enjoy from their homes. Some of those manufacturers have had to scale back head counts as consumer demand has dropped off in the goods-producing sector and moved into services.
#8. Arts, entertainment, and recreation
Updated
– January 2023 layoffs: 59,000
— Change from prior month: +7,000
— Change from January 2022: -29,000
– January 2023 layoff rate: 2.5% (Rank: #1)
— Change from prior month: +0.3 percentage points
— Change from January 2022: -1.5 percentage points
The arts and entertainment sector was among the hardest hit in the steep COVID-19 recession of 2020. Public health recommendations meant consumers were extremely wary of businesses like theme parks and airlines, which scaled back or closed operations for a time. The drop-off in demand was particularly difficult for movie theaters as Americans leaned into digital streaming services at home.
#7. Wholesale trade
Updated
– January 2023 layoffs: 62,000
— Change from prior month: +3,000
— Change from January 2022: +25,000
– January 2023 layoff rate: 1.0% (Rank: #8)
— Change from prior month: No change
— Change from January 2022: +0.4 percentage points
Wholesale trade companies are intermediaries that don’t necessarily advertise their business to consumers. They operate in the background, buying inventory from manufacturers and reselling it to retailers. An American working in wholesale may be employed by Costco or a medical wholesaler like McKesson.
#6. Health care and social assistance
Updated
– January 2023 layoffs: 112,000
— Change from prior month: -8,000
— Change from January 2022: -22,000
– January 2023 layoff rate: 0.5% (Rank: #15)
— Change from prior month: -0.1 percentage points
— Change from January 2022: -0.2 percentage points
The health care and social assistance sector is experiencing rising demand for its services as Americans continue to get older and live longer on average. The pandemic exhausted health care workers and accelerated the shift from in-hospital care to home care for elderly patients. While medical care costs have risen with inflation, the health care industry is also at a crisis point trying to attract enough new nurses to care for Americans.
#5. Transportation, warehousing, and utilities
Updated
– January 2023 layoffs: 123,000
— Change from prior month: +16,000
— Change from January 2022: +52,000
– January 2023 layoff rate: 1.7% (Rank: #4)
— Change from prior month: +0.2 percentage points
— Change from January 2022: +0.7 percentage points
The transportation warehousing and utilities industry encompasses the massive supply chain in the U.S., which experienced unending hiccups and shocks throughout the last several years. Freight shipping companies have laid off staff over the last year, citing difficult economic conditions that have tamped down demand.
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#4. Retail trade
Updated
– January 2023 layoffs: 137,000
— Change from prior month: -1,000
— Change from January 2022: -1,000
– January 2023 layoff rate: 0.9% (Rank: #10)
— Change from prior month: No change
— Change from January 2022: No change
Retail trade is one of the largest employers in the country and includes employees at companies like Target and Kroger brand grocery stores. Workers in these industries have faced some of the most difficult working conditions as they served customers through the dangers of the COVID-19 pandemic. This year, companies like Walmart and Nordstrom have announced cuts to their workforces.
#3. Accommodation and food services
Updated
– January 2023 layoffs: 139,000
— Change from prior month: -2,000
— Change from January 2022: +20,000
– January 2023 layoff rate: 1.0% (Rank: #8)
— Change from prior month: No change
— Change from January 2022: +0.1 percentage points
The accommodation and food services industry comprises hotels, motels, full-service restaurants, and fast food chains that employ tens of millions of Americans. These leisure services struggled in the first two years of the pandemic as Americans pulled back on activities that they felt could expose them to COVID-19.
#2. Construction
Updated
– January 2023 layoffs: 172,000
— Change from prior month: +6,000
— Change from January 2022: +32,000
– January 2023 layoff rate: 2.2% (Rank: #3)
— Change from prior month: +0.1 percentage points
— Change from January 2022: +0.4 percentage points
The construction industry suffered a crippling pause at the start of the pandemic that resulted in a shock to home inventory. But as the pandemic progressed, so too did new home, multifamily, and commercial construction. With vaccines now widely available, pressure will come from higher interest rates driving down demand for new homes.
#1. Professional and business services
Updated
– January 2023 layoffs: 528,000
— Change from prior month: +190,000
— Change from January 2022: +207,000
– January 2023 layoff rate: 2.3% (Rank: #2)
— Change from prior month: +0.8 percentage points
— Change from January 2022: +0.9 percentage points
The professional and business services industry comprises attorneys, marketing, accountants, and other professionals who support businesses in mostly white-collar positions. Many of these positions have been safe over the past three years as demand from consumers remained hot and companies seemingly couldn’t find enough workers to fill jobs. But interest-rate hikes and bank failures may spell trouble.
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