Job Growth Slowed Down in March With Only 236,000 Positions Added

What happened

In March, the U.S. economy added 236,000 new jobs, which was a few thousand less than what economists expected. The unemployment rate fell from 3.6% to 3.5%, which is comparable to where it sat before the pandemic began.

So what

In January, the U.S. economy added 472,000 jobs (a figure initially reported as 517,000 but eventually adjusted downward). That month, the jobless rate fell to 3.4%, representing a 54-year low. (As a point of clarity, the unemployment rate measures the number of workers who want to participate in the labor force but are unable to due to a lack of finding work. It does not account for retirees or those opting out of the labor market.)

In February, the economy added 326,000 jobs. March's jobs gain was notable, but considerably smaller than the gains recorded during the first two months of the year. March's 236,000 jobs also represent the smallest monthly gain since a decline in December of 2020.

"The labor market in March came in like a lion with a banking crisis and more layoffs, and is going out like a lamb with a solid jobs report," said Daniel Zhao, Glassdoor's lead economist, in a statement. "The labor market is still strong, but it's gliding slowly back down to Earth."

Now what

Normally, a strong jobs report is considered positive news, as it's indicative of a stable economy. In recent months, strong jobs data has led to stock market upheaval and fear among economists. 

The reason? Inflation is still a major problem for consumers, and the Federal Reserve is intent on fighting it by implementing interest rate hikes. But since March's jobs data wasn't nearly as impressive as that of January and February, this news might prompt the Fed to slow down on interest rate hikes, thereby offering consumers in need of loans some relief.

A cooling on the rate hike front might also help quell the recession fears consumers and financial experts alike have been harboring since mid-2022. Aggressive interest rate hikes have the potential to produce a significant pullback in consumer spending, and that could be enough to fuel a broad economic downturn. If the Fed hits pause on its interest rate hikes, it might allow for steadier spending in 2023, thereby allowing the economy to avoid a recession. 

Meanwhile, March's lower jobs numbers should not fuel recession fears, either. While the number of jobs added last month is considerably lower than the number added in January and February, between 2010 and 2019, the U.S. economy added an average of 183,000 jobs a month. So an addition of 236,000 jobs puts the labor market in a stable, solid place.