President Joe Biden on Friday cast the latest figures on the U.S. jobs market as encouraging for Americans’ concerns about inflation.
The March nonfarm payrolls report showed the American economy added 431,000 jobs last month, with the unemployment rate falling to 3.6% from 3.8% and the percentage of people in the labor force edging up to a new pandemic high of 62.4% from 62.3%.
As more Americans get jobs, “it’s going to help ease the supply pressures we’ve seen,” Biden said in a brief speech on the employment data.
“And that’s good news for fighting inflation, it’s good news for our economy, and it means that our economy has gone from being on the mend to being on the move.”
Some economists also highlighted the rise in people joining the labor force — and the implications for efforts to tame inflation.
“If the recent trends in wage growth and participation continue, the chance of the Fed then continuing to hike by 50 [basis points] per meeting will drop. Rates still need to rise substantially, but the Fed won’t need to go overboard this year if the labor market is normalizing,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics, in a note.
In Friday’s speech, Biden also highlighted how workers are benefiting from the strong job market, such as through increases in wages.
“People are making more money, they’re finding better jobs and — after decades of being mistreated and paid too little — more and more American workers have real power now to get better wages and to do what’s best for themselves and
their families,” the president said.
“Some people see that as a problem. We’ve had this discussion in the past. I don’t. I see it as long overdue.”
Pantheon’s Shepherdson flagged rises in pay as well, but noted they’re cooling off.
“Jobs aside, the key number in this report is the modest 0.4% rebound in average hourly earnings, which rose by a mere 0.1% in February. One soft print, out of the blue, is easy to dismiss as noise, but two is harder to ignore; three would be definitive, so the April number is now hugely important,” the economist said.
“Without sustained rapid wage growth, an inflation spike can’t become a spiral,” Shepherdson added.
The headline number for the jobs report fell short of forecasts, while the figure for unemployment came in better than expected. Economists polled by The Wall Street Journal had expected 490,000 jobs and a jobless rate of 3.7%.
traded modestly lower around mid-day Friday, after the jobs report reinforced a picture of a healthy economy but also underlined expectations the Federal Reserve will be aggressive in delivering interest-rate hikes in its effort to rein in persistently hot inflation.