Washington, DC, April 7, 2006--Payrolls rose by a better-than-expected 211,000 in March while the jobless rate fell back to 4.7% from 4.8%, according to the Labor Department.
Wage growth was tame, rising 0.2% for the month. Average hourly wages are up 3.4% in the past year, down from 3.5% last month.
Stock futures rallied on the news, while bonds fell initially then bounced higher. The dollar was lower.
The Federal Reserve will see one more jobs report before the next meeting on May 10th. The Fed has said it is concerned that inflation could spike as the economy runs out of unused labor.
The March report shows "resource utilization" in the labor market continued to tighten in March, but the feared effects of higher wages were unrealized. The Fed is expected to raise overnight rates in May to 5%, but further rate hikes after that are up in the air.
Job growth in March was concentrated in services, where 202,000 jobs were created, according to the survey of businesses. Goods-producing industries added 9,000 workers. Government added 24,000.
The jobless rate fell to 4.7%, matching the cyclical low. According to the household survey, employment rose by 384,000 in March, while the number of unemployed people fell by 182,000 to 7 million.
The labor force participation rate was steady at 66.1%.
The increase in payrolls was better than the 187,000 expected by economists.
But payrolls in January and December were revised lower by a total of 34,000, leaving total payrolls slightly lower than expected.
February's gain was revised from 243,000 to 225,000.
The jobless rate was expected to remain at 4.8%.
Economists say the labor market is fundamentally sound.
The average workweek was steady at 33.8 hours. Total hours worked in the economy increased 0.2%.
Payrolls have increased 2.1 million in the past year, an average monthly growth of 174,000. The economy requires about 125,000 to 150,000 new jobs a month to stay even with population growth.
Manufacturing jobs fell by 5,000 in March, the second straight decline. Factory jobs are down 56,000 in the past year. The average workweek in manufacturing was steady at 41 hours, with 4.5 hours of overtime.
Construction firms added 7,000 jobs in March after gaining an average of 40,000 jobs in January and February.
In the services, job growth was strongest in professional and business services (up 52,000) and leisure and hospitality (up 42,000).
