The economy added 431,000 jobs in March, the U.S. Department of Labor’s Bureau of Labor Statistics (BLS) reported this morning. It marked the 11th straight month in which the U.S. added more than 400,000 jobs, the longest streak since 1939.
Meanwhile, both the unemployment rate and the number of unemployed people were nearing their pre-pandemic levels. The unemployment rate dipped by 0.2 percentage points to 3.6%, compared to 3.5% in February 2020, while the number of unemployed persons decreased by 318,000 to 6 million, close to the 5.7 million unemployed in February 2020.
Overall, the U.S. has added 562,000 jobs per month in the first three months of 2022, matching the average monthly gain for all of 2021. Employment, however, is down by 1.6 million people, or 1%, from its pre-pandemic level in February 2020.
“March was another strong month for the job market,” Mike Fratantoni, senior vice president and chief economist for the Mortgage Bankers Association said. “Job gains were well above what can be sustained for the longer term, the unemployment rate dropped — despite a small increase in labor force participation — and wage growth increased again. Furthermore, the job gains for both January and February were revised higher.”
“The rapid drop in the unemployment rate says that the pool of potentially available workers continues to drain quickly,” he continued. “With the large number of job openings reported in the most recent data, there will continue to be significant upward pressure on wages, with wage growth over the last 12 months running at 5.6%.”
Average hourly earnings for all employees on private nonfarm payrolls rose by 13 cents to $31.73 in March, the BLS said. Over the past 12 months, average hourly earnings have increased by 5.6%.
Jobs Added in Construction, Financial Activities
The jobs added in March came primarily in the leisure and hospitality, professional and business services, retail trade, and manufacturing sectors, the report said. Significantly for the housing industry, employment in construction continued its upward trend in March, adding 19,000 jobs, and that sector has returned to its February 2020 level, the BLS said.
Employment in financial activities rose in March, with gains in real estate and rental and leasing (14,000), and in securities, commodity contracts, and investments (5,000). Employment in financial activities is 41,000 above its level in February 2020.
Among the unemployed, the number of permanent job losers decreased by 191,000 to 1.4 million in March, little different from the February 2020 level of 1.3 million, the BLS said. The number of people on temporary layoff also was little changed in March from February, at 787,000, and also has essentially returned to its February 2020 level, the report states.
As for the Great Resignation, the BLS reports that the number of job leavers — unemployed people who quit or voluntarily left their previous job and began looking for a new one — fell by 176,000 in March to 787,000.
The number of long-term unemployed (those jobless for 27 weeks or more) in March decreased by 274,000 to 1.4 million, about 307,000 higher than in February 2020, the BLS said. The long-term unemployed accounted for 23.9% of all those unemployed in March.
The labor force participation rate in March was 62.4%, essentially the same as in February, while the employment-population ratio increased by 0.2 percentage point to 60.1%. Both measures remained below their February 2020 levels (63.4% and 61.2%, respectively), the BLS said.
The number of people not in the labor force who currently want a job increased by 382,000 to 5.7 million in March, following a decrease of a similar amount in February, the report states. The number remains above its February 2020 level of 5 million. The BLS said these individuals were not counted as unemployed because they were not actively looking for work during the four weeks prior to the survey or were unavailable to take a job.
Back to the Office
In March, 10% of those employed teleworked because of the pandemic, down from 13% percent in February. This refers to employees who teleworked or worked at home for pay at some point in the four weeks prior to the survey specifically because of the pandemic.
By sector, employment in leisure and hospitality saw the largest gains, adding 112,000 jobs in March. Job growth occurred in food services and drinking places (61,000) and accommodation (25,000). Employment in leisure and hospitality was among the sectors hardest hit by the pandemic, and employment in this sector is still down by 1.5 million, or 8.7%, since February 2020.
“In addition to the strong job gains, the employment disruptions caused by the pandemic also continue to show improvement,” Fratantoni noted. “Only 10% of workers reported teleworking due to the pandemic in March, down from 13% in February and less than half the level from its peak. As the federal government and others return to work in April, this number should drop sharply, which may well lead to further job changes in retail, professional services, and other sectors that are dependent on in-person work. This is good news for commercial real estate lenders and investors.”
He added that while mortgage rates have spiked more than half a percentage point over the past two weeks, reducing affordability for many potential first-time homebuyers, “the increase in wages will certainly somewhat help offset that hurdle. And the confidence that many potential homebuyers have in their financial situation also benefits from this historically strong job market.”
Fratantoni said the MBA continues to expect that the Federal Reserve will “move rates up expeditiously to counter surging inflation,” and that today’s jobs report “only adds more urgency to their plans to do so.”
