The U.S. job market returned to normal in March with robust hiring and wage growth across many industries, easing fears about the economy’s health after hiring cratered in February.
The economy added 196,000 jobs last month, the Labor Department reported Friday, in line with expectations and a rebound from what now seems an anomalous 33,000 jobs added in February.
The unemployment rate stayed at 3.8 percent, and economists cited strong hiring to predict the United States faces almost no risk of an imminent recession.
“The labor market remains healthy, and last month is just an outlier,” said Brad McMillan, chief investment officer at Commonwealth Financial Network.
February’s job slowdown may have been driven by a pair of temporary factors: employers’ hesitation to bring on new employees in the deep of winter and an economic hangover from the lengthy government shutdown that shook the confidence of business owners and investors.
Most economists predict the economy will slow this year to a good but not great pace as the effects of the tax cuts and additional government spending fade. They expect the pace of hiring to moderate as companies see less need to expand.
Job gains were strong in health care, restaurants and professional services such as computer services. But blue-collar hiring decelerated in recent weeks with manufacturing shedding 6,000 jobs, partly driven by the closure of a large General Motors auto factory in Ohio.
The pace of construction jobs also slowed after months of robust gains. Experts are watching to see if this is a temporary easing or the beginning of a deeper slowdown in certain parts of the economy.
The level of temporary workers, while still high, has stalled this year, another sign the economy might be cooling as widely expected, noted said Erica Groshen, a visiting scholar at Cornell University and former head of the Bureau of Labor Statistics, the nonpartisan agency that tabulates the jobs data.
“The labor market is very strong . . . the only slightly yellow warning sign is temporary help,” she said. “It’s a leading indicator that can be a harbinger that companies are slowing down hiring or take a pause.”
Businesses typically hire temporary workers when they want to expand their workforce quickly, but those workers are also often the first to go when firms try to cut costs.
President Donald Trump said “we’re doing very well” Friday before boarding a plane to head to the U.S.-Mexico border. He blamed any economic weakness on the Federal Reserve, arguing the economy would be performing like a “rocketship” if the central bank would drop rates.
Trump is in the process of nominating two close allies of his – businessman Herman Cain and conservative commentator Stephen Moore – to the Fed board who share his views on rates.
The United States has had more job openings than unemployed workers since last summer, spurring companies to raise wages and offer signing bonuses and more training programs in an effort to recruit and train employees.
Wages grew 3.2 percent in the past year, the Labor Department said, slightly below the February rate, which was the best in a decade and well above the 1.5 percent rate of inflation.
Lower income workers have seen the biggest pay hikes in recent months as employers report they are struggling to find enough people to fill roles, and many states have enacted minimum wage increases.
Adam Roston has seen competition heat up for warehouse workers. In central Pennsylvania, a major trucking hub, one warehouse raised pay from $13.50 to $14.50 an hour and saw worker retention jump 400 percent, said Roston, the chief executive of Bluecrewjobs.com, a specialized job site for companies looking for temporary workers.
“Everyone is having trouble hiring. Raising wages is one way to fix it,” Roston said.
Target announced this week it will raise its starting pay to $13 an hour in June, a full dollar increase over the company’s current minimum wage and another sign of how competition has escalated for workers. This is the third pay raise Target has done in the past two years.
As long as hiring remains strong and wages are climbing, the economy is likely to continue growing, experts say, because people typically spend more when they are not worried about losing their job.
“The strong jobs report minimizes fears that the U.S. is going into a sharp downturn,” said Robin Anderson, senior economist at Principal Global Investors.
Like many economists, Anderson predicts job growth will be slower this year than in 2018 but wages should continue to rise.
The number of Americans filing new applications for unemployment benefits fell to the lowest level since 1969 this week.
Many companies are hiring people they might not have considered before for jobs, including people who have a felony on their record, people with disabilities and Americans who haven’t completed college.
“Companies are no longer look for the perfect candidate. They are asking what can we make do with,” said Josh Wright, chief economist at iCIMS, a talent acquisition platform.
Bruno Sahagun Palao, a 21-year-old in Miami, landed a full-time job as a business consultant at American Express last month. He helps companies understand American Express products and figure out what would work best for them. His salary is more than $50,000 a year plus benefits, meaning he is already earning the average pay for all U.S. workers in the first year of his career.
“It wasn’t just the salary that brought me here. There are a lot of growth opportunities in this department,” said Palao in an interview on his lunch break. “My goal is not to get a job, it’s to build a career.”
In the evenings, Palao is working toward his bachelor’s degree in business administration. He credits his early success to a program called Year Up that trains young people on job skills, including how to interview and build a LinkedIn profile, and helps them land internships with top companies.