WASHINGTON – U.S. employers in March hired workers at the fastest clip in four years, offering the brightest sign yet for the struggling labor market.
Nonfarm business payrolls grew by 308,000 jobs last month, faster than at any time since April of 2000, the Labor Department reported Friday.
Still, the unemployment rate inched up a tenth of a percentage point to 5.7%. In recent months, the unemployment rate has declined mainly because people grew discouraged and stopped looking for work. But the uptick suggests that more job seekers renewed their searches last month.
The report surpassed forecasts. Economists had expected payrolls to grow by only 120,000 jobs, and for the unemployment rate to hold steady at 5.6%, according to a survey by Dow Jones Newswires and CNBC.
Economists had been betting since December that faster economic growth would spur employers to hire workers at a pace of about 120,000 a month. They were consistently proven wrong: the average monthly job growth since August has been just 108,429.
One month of strong gains doesn't make a trend, wrote Steven Wood, chief economist at Insight Economics. But "this is the most hopeful sign that we have had that the economic expansion is becoming self-sustaining." He added that any action by the Federal Reserve on interest rates "is still many months away, at the soonest."
Federal-funds futures prices plummeted after the report, pricing in a 100% change for a quarter-point rate increase in August. The market also started to factor in an additional quarter-point increase in November. At the close of Thursday's trading, the market was pricing in a 50% chance of a quarter-point increase in August.
Revisions to payrolls for January and February showed more jobs were added during those months than previously thought. Nonfarm payrolls grew 159,000 in January, up from the previous estimate of 97,000; payrolls climbed 46,000 in February, up from the initial estimate of a 21,000 gain.
The health of the nation's economy, especially the job climate, is a major issue in this year's presidential race. The economy has lost almost two million jobs since Mr. Bush took office in January 2001. The economy rebounded strongly after the 2001 recession and terrorist attacks. But job creation didn't follow, and hiring remained at a standstill. That appears to be changing. Businesses have added to their payrolls—however slightly—for seven straight months.
But for out-of-work Americans, the economic rebound has been frustratingly slow. In March, there were 8.35 million people unemployed, compared with 8.17 million the previous month. The average duration of unemployment has been more than 20 weeks, a 20-year high.
As a result, jobless workers have increasingly accepted part-time work. The number of people who worked part-time for economic reasons rose to 4.7 million in March from 4.4 million a month earlier.
Employers expanded payrolls in all major categories last month, except the information industry, which shed 1,000 jobs.
"At least some of the increase in payrolls reflects the end of the supermarket strike in California and better weather in March," wrote Ian Shepherdson, chief U.S. economists, in a morning note, "but this surely does not account for the entire increase."
For the first time in 44 months, the nation's factories didn't lose jobs. Manufacturing payrolls, which have shed jobs since the summer of 2000, held steady last month. |
