Did unemployment rates increase or decrease over March?
The latest jobs data for the last month has been released and is positive, despite missing analyst estimations.
April fool's day be damned, the US Bureau of Labor Statistics released their summary of the US employment situation for March 2022. The standout information is the further decline in unemployment, now down to 3.6 percent, as well as as non-farm employment rising by 431,000 people, though this number was slightly down on estimates of 450,000.
Compared to a month ago, the signs are still positive for the US economic recovery. However, inflation is still at record levels and is yet to show signs of slowing.
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What does the unemployment data show?
The number of unemployed people declined by 318,000 to 6 million. This is the closest level the US economy has reached since the covid-19 pandemic began in March 2020. Employment in leisure and hospitality continued to increase, with a gain of 112,000 in March. Job growth of 61,000 occurred in food services and drinking places and 25,000 more in accommodation. Employment in leisure and hospitality is down by 1.5 million, around 8.7 percent, since February 2020.
This compares to the more than 678,000 jobs that were created in the month of February, 200,000 more than the 467,000 added in January. Overall, job growth averaged 562,000 per month in the first quarter of 2022, the same as the average monthly gain for 2021.
“It’s all about the virus, the virus, the virus — and the virus’s grip on the American psyche seems to have loosened and we may be moving toward the idea that ‘the Covid era’ of the US economy is done,” said Austan Goolsbee, a professor at the University of Chicago and a chairman of the Council of Economic Advisers under President Barack Obama.
A persisting problem in the US economy has been the unemployment rate of black Americans. Currently, 6.2 percent of black Americans are unemployed, compared to only 3.2 percent of whites being unemployed.
What could the outcome of this data mean for interest rates?
Economists are expecting an interest rate increase of up to 50 basis points. US interest rates currently stand at 50 basis points; the increase to 100 would mean the highest interest rates since 2017.
With more positive unemployment news, it is even more likely that there will be another interest rate raise come the next meeting at the start of May.