'Another blockbuster month': Unemployment drops even more as wages outpace inflation

Economic experts are happily surprised by the just-released March jobs report, which – contrary to expectations – saw unemployment has dropped further, overall employment has grown, and wages continue to outpace inflation.

“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),” The Washington Post’s Heather Long writes. “Unemployment rate: 3.8% (vs 3.9% in Feb) Wage growth: 4.1% in past year (well above 3.2% inflation).”

Or, as CNBC’s Carl Quintanilla sums up the wages and inflation numbers: “Wage growth: 4.1% > Inflation: 3.2%”

Today’s 3.8% unemployment rate is far below what economists consider “full employment,” often defined as unemployment at 5% or below.

“This is truly about as close to full employment as the US has managed to get outside of wartime mobilization,” notes Ernie Tedeschi, former chief economist of the White House’s Council of Economic Advisers, responding to the jobs report. He adds, “employment and labor force participation rates are extraordinary,” and “likely ranking among the highest in US history.”

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As MSNBC’s “Morning Joe” economic analyst Steven Rattner, a former Obama White House official notes, “We’re now at 26 consecutive months of sub-4% unemployment, the longest such stretch since the late 1960s.”

“Yet another unexpectedly strong month for job growth. For all the talk of ‘cooling,’ monthly gains have been extremely steady for more than a year,” reports The New York Times’ Ben Casselman, adding: “Blowout household survey. Labor force and employment both grew by nearly half a million. Unemployment down slightly,” he notes, but adds, “The Black unemployment rate jumped 0.8 points to 6.4%, highest since August 2022. Monthly numbers are noisy, but certainly concerning.”

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The job market is “the best it’s been in most of our lifetimes. And it’s endured even as inflation has come down significantly in the last year and a half,” observes former Biden White House National Economic Council deputy director Bharat Ramamurti.

“I think the decisions President Biden and congressional Democrats made in early 2021 deserve a lot of credit for the strong economy we have today,” he says, and points to his report at Democracy.

Some experts had expected the unemployment rate to rise to or above 4%. On Thursday at CNN, Elisabeth Buchwald wrote: “For the past 50 years, the US unemployment rate has mostly been far above 4%, even rocketing to almost 15% during the pandemic. Yet in the turbulent period that followed lockdowns and other economic disruptions from the pandemic, it has stayed below the 4% level for more than two years.”

“That remarkable streak could end on Friday at 8:30 a.m. ET, when the Bureau of Labor Statistics releases its March jobs report.”

Instead, it dropped to 3.8%.

Buchwald had quoted Michael Strain, director of economic policy studies at the American Enterprise Institute (AEI), who had called it “very foreseeable” the jobless rate could reach 4%.