The U.S. labor market continues to show signs of strength, according to the Bureau of Labor Statistics (BLS), reporting the addition of 236,000 jobs in March against expectations for 239,000. This result meant the unemployment rate dipped to 3.5% from 3.6%, and February's gain of 311,000 jobs was revised higher to 326,000.

The release of the labor report comes ahead of the U.S. Federal Reserve's meeting in May, during which the central bank will decide whether to continue tightening monetary policy or pause its now over one-year long series of rate hikes. Prior to the report, short-term rate futures markets pointed out that there was approximately a two-in-three chance of a pause from the Fed in May.

However, the indications of advanced data this week were showing some potential weaknesses in the labor market, with the ADP's private sector job addition for March at 145,000, shorter than the 210,000 expected. Additionally, the Department of Labor's weekly initial jobless claims were further up at 228,000 versus the 200,000 projected while the earlier week's 192,000 initial claims was revised to 246,000.

So far, the U.S. economy had managed to experience job growth and a low unemployment rate even during periods of high economic uncertainty and the latest payrolls report sustained this pattern. The labor market had held up better compared to the various other components of the economy, such as that of the global trade, yet any indications of the labor market slowing down would be the most significant risk for the U.S. economy. Yet, for the moment, it appears the labor market remains reasonably strong, allaying fears of a potential slowdown.



Other News from Today