The unemployment rate slid to 3.6 percent in March from 3.8 percent in February, the government said Friday. The big news was that with an additional 431,000 nonfarm payroll jobs added in March, a total of 2.273 million jobs have been created over the past four months. This is the fastest payroll increase since 1939.
I find little that foretells trouble ahead in the Labor Department’s jobless survey. Job growth is surging, and this will help bring down inflation because more people are returning to work, so more will be produced, easing supply-chain worries.
Rising wages are also helping consumers—the annual average is up 5.6 percent—since most of the wage increase is for service workers that need it the most.
MarketWatch’s Andew Keshner listed those sectors where wages rose faster than the inflation rate:
- In transportation and warehousing jobs, the year-over-year growth rate in hourly earnings was 7.9%. Paying an average hourly rate of $27.79, these workers have been much-needed with e-commerce sales booming and supply chains trying to unsnarl.
- In leisure and hospitality jobs, the year-over-year growth was even higher, at 11.8%. Hotels, restaurants and bars kept staffing up, accounting for roughly one-quarter of all the March jobs gains and paying an average $19.68 an hour in March.
- Jobs in retail trade saw 6.5% average hourly earnings growth, paying an average $22.89 per hour. This sector includes work in everything from grocery stores to gas stations, clothing, hardware and more.
- Jobs in “professional and business services” had a 6.6% increase, paying an average $38.18 an hour. In March, this sector — covering all sorts of white-collar work from accountants and lawyers to call centers and administrative staff — added 102,000 jobs.
It has been one of the fastest recoveries since the 1981 recession per Calculated Risk’s graph (red line on graph), despite the one-month-old Ukraine war. The U.S. economy was going strong before the pandemic and has almost returned to its pre-pandemic level of February 2020; in part because the recession lasted just two months—March to April 2020.
We are already seeing what a ‘new normal’ might look like in the years to come. Government has had to step up spending to tame the pandemic, just as it did during Roosevelt’s New Deal to recover from the Great Depression. Now, President Biden’s proposed $5.8 trillion budget for the 2023 fiscal year must address what might become a prolonged European war.
“Budgets are statements of values, and the budget I am releasing today sends a clear message that we value fiscal responsibility, safety and security at home and around the world, and the investments needed to continue our equitable growth and build a better America,” said President Biden on its release.
Now isn’t the time to worry about inflation or the Fed engineering a soft landing, or any ‘landing’ at all. It is is precisely during such uncertain times that we need elevated growth, and a government that steps up while partisan politics step down, even with an upcoming election in November.
Harlan Green © 2022
Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen
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