Jobs report smashes forecasts as red hot labor market confounds Wall Street

The U.S. economy added the biggest number of new jobs to the economy in nearly a year last month, as wage gains continue to indicate a hot labor market will stoke inflation concern into the spring and summer. 

The Labor Department's Bureau of Labor Statistics said Friday that 303,000 net new jobs were created in March. That's up from the downwardly revised total of 275,000 recorded in February and firmly ahead of the six-month average of around 231,000. Economists were looking for a headline total of 212,000.

The economy has added 829,000 new jobs over the first three months of the year.

Average hourly earnings held steady from February levels and were up by 0.3%, matching the smallest increase since last autumn. The year-on-year gain was pegged at 4.1%, one of the highest totals since summer 2021.

Meanwhile, the labor-force-participation rate edged higher, to 62.7%, while the headline unemployment rate slipped to 3.8%, just inside Wall Street forecasts.

JUST IN: Another blockbuster month for jobs. The US economy added 303,000 jobs in March — way above expectations. The big gains were healthcare (72k) and gov’t (71k).

Unemployment rate: 3.8% (vs 3.9% in Feb)

Wage growth: 4.1% in past year (well above 3.2% inflation) pic.twitter.com/inp5TFxHpb— Heather Long (@byHeatherLong) April 5, 2024

U.S. stocks held earlier gains following the data release, with the S&P 500 called 16 points higher and the Dow Jones Industrial Average looking at a 95-point advance. The tech-focused Nasdaq is called 74 points higher.

Benchmark 10-year Treasury note yields were marked 6 basis points (0.06 percentage point) higher at 4.391% while 2-year notes were pegged 5 basis points higher at 4.704%.

Earlier this week, payroll-processing group ADP said private-sector hiring improved to around 184,000 last month, well ahead of Wall Street's 140,000 forecast. Wage gains for job switchers surged to 10%, nearly double the rate of those remaining in their current positions, the report showed.

Challenger Gray's benchmark report on corporate-job losses, meanwhile, showed just under 85,000 firings last month. The tally takes the first-quarter total to around 257,254, a 5% decline from the year-earlier level.