US Job Growth Spikes, Unemployment Falls to 3.8%

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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