US Job Growth Spikes, Unemployment Falls to 3.8%

Facts

• US employers exceeded expectations in March, adding 303K more nonfarm jobs, while the unemployment rate fell to 3.8%.¹
• The rise beat Dow Jones' estimate of 200K job additions, according to the US Bureau of Labor Statistics. Average hourly earnings rose 4.1% from a year ago.²
• The new figures reduced expectations for near-term Federal Reserve rate cuts from the 5.25-5.5% range now, leading investors to wager less on such a move.³
• With the service industry bolstering the economy, the unemployment rate has held below 4% since 2022, the longest stretch in 50 years. Friday's jobs report boosted stock indices.⁴
• A household survey showed that the rise in job creation was overwhelmingly dominated by part-time workers, rising by 691K, while full-time roles fell by 6K.²
• Pres. Joe Biden hailed the positive jobs report, but improved consumer sentiment of recent months isn't translating to gains according to many polls.⁴

Sources: ¹Westlaw Today, ²CNBC, ³Archive and ⁴Washington Post.

Narratives

• Democratic narrative, as provided by Guardian. Biden can celebrate this significant achievement, marking the 39th consecutive month of job growth. During his presidency, 15M jobs have been created — starkly contrasting with the crisis he inherited. Now he must project his message to the masses to bolster his reelection chances.
• Republican narrative, as provided by National Review. Biden shouldn't celebrate too much, because there are still larger problems underpinning the economy, exacerbated by his administration's failed policies. Long-term projections foresee budget deficits growing steadily, and attribute much to his ongoing public spending splurges.

Predictions