The U.S. labor market sprang back to hit the Federal Reserve’s sweet spot, alleviating some concern about a deeper downturn.
Better-than-expected hiring in March and unemployment hovering near a five-decade low signal worker demand remains robust even as employers confront economic crosscurrents.
Wage gains eased, reinforcing the Fed’s message that interest rates are on hold, while the payrolls figures indicate February’s weakness was an anomaly.
“This report was welcome evidence that the economy is not falling off a cliff, there’s not a recession coming. This is the kind of report that we needed after such an eye-popping number in February,” said Ellen Zentner, chief U.S. economist at Morgan Stanley.
“I would call this a normalization, after very volatile numbers in the first part of the year.”
The report aligns with Fed officials’ views that while the job market remains tight, global growth concerns weigh on the outlook and inflation still is subdued.
Despite signs of recent weakness in manufacturing and retail sales, and reduced labor-force participation, the report shows the economy is broadly intact.
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Payrolls rose 196,000 after a 33,000 advance, Friday’s Labor Department report showed, topping the 177,000 forecast in a Bloomberg’s survey and boosting the February tally from an initially reported 20,000 gain.
U.S. stocks rose for a seventh day.
The jobless rate was unchanged, at 3.8 percent, while average hourly earnings increased 3.2 percent from the previous year, missing all estimates and down from the best pace of the expansion.