US employers add surprisingly strong 303K jobs in March as unemployment ticks lower

US employers collectively increased their payrolls by a hefty 303,000 in March — the fifth consecutive month of hotter-than-expected job gains.

The monthly figure blew past the 200,000 job gains economists expected.

Though a strong job market historically keeps interest rate levels elevated, Wall Street has been wary of making predictions off of initial figures in recent months, as the Labor Department has made some drastic revisions.

February’s surprisingly strong 275,000 gains were revised down to 270,000, and the Labor Department steeply revised January’s blockbuster 353,000 additional roles down to 256,000 on Friday.

Last month, the federal agency also said that Decembers hefty gain of 333,000 that was initially reported was also slashed to 290,000.

For all of 2023, revisions took 520,000 roles off of initial estimates, countering a historical trend where final numbers are typically higher than first readings, according to CNBC.

The closely watched jobs report also showed that the unemployment ticked lower, from 3.9% in February to 3.8% in March.

When employment rate initially edged up from the 3.7% rate it previoulsy sat at for three consecutive months, economists said that it boosted the Federal Reserve’s case for rate cuts to occur in June as widely expected.

Fed officials have kept interest rates at their current 22-year high, between 5.25% and 5.5%, since their July 2023 policy meeting.

Stubbornly high interest rates have made it more difficult than ever for Americans to afford a home as mortgage rates have also skyrocketed since the pandemic as it has become more expensive for banks to borrow capital.

According to Freddie Mac, the average 30-year fixed-rate mortgage rate stands at a whopping 6.82% at the time fo writing — nearly double what it was four years ago.

Fed Chair Jerome Powell has argued that interest rates can start to come down once inflation eases up.

Given the strength of the economy and progress on inflation so far, we have time to let the incoming data guide our decisions on policy, Powell said during prepared remarks at the Stanford Graduate School of Business on Wednesday.

Central bankers are making decisions meeting by meeting, he added.

But per the latest Consumer Price Index which tracks changes in the costs of everyday goods and services  US inflation rose a stiffer-than-expected 3.2% in February.

Yet another yearly increase in consumer prices means that the CPI reading has yet to drop on a yearly basis since President Joe Bidens term began in January 2021.

The closest the economy has gotten to a yearly decrease since Biden took office was in July 2022, when the inflation rate remain unchanged, at a sky-high 8.5%.

On a monthly basis, prices also edged 0.4% in February, driven primarily by the indexes for shelter and gasoline, which contributed to more than 60% of the advance, the Bureau of Labor Statistics reported.

Marchs CPI reading is set to be released on April 10.