Job Market Cools, Unemployment Ticks Lower: US Adds 236K Jobs In March, Missing Economist Expectations

The U.S. added 236,000 jobs last month, below average economist estimates of 240,000 jobs.

What Happened: New data from the Bureau of Labor Statistics showed the U.S. unemployment rate is at 3.5%, below economist estimates of 3.6%. The labor participation rate continued to rise to 62.6%, compared to the 63.4% pre-COVID-19 pandemic rate in February 2020.

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Wages were up 4.2% year-over-year and increased 0.3% from February. The leisure and hospitality industry led the job creation in March, adding 72,000 total positions.

The Labor Department also revised January's total job growth lower by 32,000 jobs to +472,000 and February's job growth higher by 15,000 jobs to +326,000.

Why It Matters: The Federal Reserve is paying close attention to the jobs market as the central bank continues its battle to bring inflation down to its 2% target range.

The Fed hiked interest rates by 25 basis points in March, bringing its target fed funds rate up to a range of 4.75% to 5%.

The Consumer Price Index (CPI) was up 6% in February, down from a 2022 peak of 9.1% in June. Following Friday's weakening jobs report, the bond market is pricing in a 54.2% chance the Fed will opt for another 0.25% interest rate hike in May.

Market Action: With the market closed for the Good Friday holiday, investors will have to wait for Monday morning to see how the SPDR S&P 500 ETF Trust SPY will react to the latest jobs report.

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