The March jobs report showed hiring far surpassed expectations, as employers added 303,000 payroll positions, while the unemployment rate dipped. After the jobs report, the S&P 500 rose moderately at Friday's open, as stocks look to bounce back from Thursday's pummeling amid growing concerns about the Fed rate-cut outlook.
Jobs Report Hits And Misses
The 303,000 overall employment gain blew past Wall Street's 200,000 forecast, according to Econoday. Private-sector employers added 232,000 jobs, above 170,000 forecasts. Government jobs rose by 71,000.
Hiring gains in January and February were revised up by a combined 22,000 jobs.
Private-sector job gains have averaged 212,000 per month over the last three months, while overall hiring has averaged 276,000.
Average hourly earnings rose 0.3% in March, as 12-month wage growth slipped to 4.1%. That matched forecasts, but only because of rounding. Unrounded, average hourly earnings rose 0.347% on the month and 4.14% from a year ago.
Wage inflation has slowed to the lowest level since June 2021, helping to bring down inflation, but further progress is still needed.
The strong hiring and solid monthly wage gain came as the average workweek lengthened back to 34.4 hours, after being cut short early in the year, with weather a factor. That combination drove a 0.8% rise in aggregate weekly pay for all U.S. workers, matching the biggest monthly gain since January 2023. That's positive for the spending outlook.
Household Survey
The headline job and wage figures come from the Labor Department's monthly survey of employers. The separate household survey details labor force participation, work status and the unemployment rate.
The household survey comes with a higher margin of error than the employer responses, so monthly changes should be taken with a grain of salt. However, the household survey has been known to lead the employer survey at economic turning points, so it shouldn't be ignored.
The unemployment rate dipped to 3.8% vs. predictions of a steady 3.9% rate.
That came as the ranks of the employed jumped by 498,000. But the number of unemployed persons dipped by just 29,000, because the labor force expanded by 449,000. Immigration is seen as an important factor behind the recent growth in the labor force.
"While employer demand remains high, worker supply is rising to meet it," wrote Indeed Hiring Lab economist Nick Bunker.
More Jobs Report Details
The health care industry added 72,000 jobs and construction firms 39,000. Leisure and hospitality firms added 49,000 jobs, including 28,000 at food service and drinking places. Retailers added 18,000 jobs, while factory employment was flat.
The details of the jobs report showed that hiring remained pretty broad-based, with the diffusion index rising to 59.4 from 58.6. Values over 50 indicate more industries are hiring than firing.
Fed Rate Cut Odds
After the March jobs report, markets are pricing in 57% odds of a rate cut by the June 12 Fed meeting, down from 64% odds before the latest data, according to CME Group's FedWatch page. Odds of a rate cut by the July 31 meeting stood at 76%, down from 80%.
For all of 2024, markets are pricing in a year-end Fed funds rate of 4.7%, up from 4.66% ahead of the jobs report. That builds in 57.5% odds of at least three quarter-point rate cuts.
S&P 500
The S&P 500 rose 0.5% after the jobs report in early Friday stock market action.
On Thursday, the S&P 500 fell 1.2%, its sharpest fall in seven weeks. The S&P 500 finished 2% below its record closing high on March 28.
The 10-year Treasury yield rose five basis points to 4.36% on Friday, though that was off intraday highs. The 10-year yield hit a four-month high of 4.43% on Wednesday. A move past that level would be likely to pressure stocks.
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