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Whew. The economy apparently isn’t sinking into a bottomless abyss.
It’s an exaggeration, of course, but there was plenty of anxiety about slower growth before the rebound in hiring in March. The U.S. added 196,000 new jobs last month after a wretched 33,000 gain in February that induced lots of indigestion.
Read: Hiring speeds up as U.S. economy adds 196,000 jobs in March
The bounce back in job creation is the latest sign the economy may have stabilized after a bout of weak growth early in the year, a period marked by the government shutdown, festering trade tensions with China and patches of dreadful weather that took a toll on industries such as construction.
The “jobs report for March reinforces our sense that there is a floor under the U.S. economy, built by years of strong hiring and increasing household wealth,” said chief economist Robert Dye of Comerica bank.
The U.S. is not ready for a big leap forward, however.
The stimulative effects of deep tax cuts and higher government spending last year have faded, for one thing, and a weaker global economy has nipped at edges of the U.S. economy.
Consider exporters. They aren’t finding it as easy to ship their goods, a problem exacerbated by strong dollar
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that’s made American wares more expensive. Exports are lower now than they were last fall.
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Stil, the ultra-strong labor market, even if it softens up in the months ahead, remains an antidote to the threat of recession for an economy that will soon set a record for longest expansion ever.
The rate of layoffs fell at the end of March to the lowest level since 1969 and the 3.8% unemployment rate sits near a half-century low. Wages are also rising at the fastest rate in nearly a decade.
Perhaps just as important, inflation remains low and is likely to stay that way in the near future. The lack of price pressures affords the Federal Reserve the opportunity to maintain its current freeze on raising interest rates.
A trio of price monitors this week on wholesale, consumer and imported goods are unlikely to upset the prevailing view of inflation. Or get the Fed to change its mind.
See: MarketWatch economic calendar
Wall Street will get a closer look at the central bank’s dovish turn when the Fed releases the cliff notes of its most recent meeting.
The Fed last month indicated it was foregoing any further increases in interest rates this year, a move that stoked further gains in the stock market
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and cause interest rates to plunge.
Read: Cresting wage gains ebb in March, but the tide isn’t turning against workers
While Fed Chairman Jerome Powell said the economy is in “ a good place,” the central bank’s own timidity clearly shows top officials are more worried than they let on.
Their hope is that the sharp decline in borrowing costs for mortgages, auto loans and other forms of lending since its retreat helps stoke faster growth in the spring and beyond.