The nation’s hiring boom continued its momentum in March, with government data released Friday morning showing the economy added 215,000 jobs last month.
Employers have been bringing on workers at a rapid clip for the past two years, and the strengthening job market is encouraging many people who had been on the sidelines to start looking for work. That pushed the unemployment rate up slightly to 5 percent in March, according to the data from the Labor Department.
Healthy job growth also has helped reassure policymakers in Washington and investors on Wall Street that the U.S. economy has withstood the turmoil from overseas — at least so far. A slowdown in China is weakening global growth, particularly in developing countries that fed its formerly voracious appetite for natural resources. In addition, a worldwide glut of oil has pummeled the once high-flying energy industry in America.
“This is confirmation that the U.S. economy is basically the one economy in the globe that can go it alone," said Tara Sinclair, chief economist at jobs site Indeed and economics professor at George Washington University. "It can potentially be a positive contributor to global growth at a time when everyone else is slowing.”
That was evident Friday morning following a plunge in overseas markets. Japan's Nikkei index dropped 3.6 percent amid weak economic data as the country struggles to combat deflation. The gloomy sentiment then spread to Europe, where London's FTSE was down 1.35 percent. Adding to the unease was the sharp decline in U.S. crude oil futures to about $37.
On Wall Street, the blue-chip Dow Jones Industrial Average fell more than 100 points in the first few minutes of trading on Friday. But the three major indexes began reversing course by mid-morning and held onto those gains for the rest of the session, fueled by the solid jobs report and an unexpectedly strong data from the manufacturing sector. The Dow and the broader Standard & Poor's 500-stock index both closed up 0.6 percent, while the tech-heavy Nasdaq rose 0.9 percent to finish at 4,915.
"The March [jobs] report is another rebuke to the Wall Street pessimism about an imminent downturn," said Douglas Holtz-Eakin, a former top economic adviser to President George W. Bush and head of the policy think-tank American Action Forum.
The government data released Friday shows the retail sector added the most jobs in March, bringing on 47,000 workers. Hiring was also robust in construction and health care, which each accounted for 37,000 jobs. The report also showed an encouraging pickup in wage growth. Average hourly earnings rose 7 cents to $25.43 and are up 2.3 percent over the past year.
However, the mining and manufacturing industries, which are most vulnerable to low oil prices and a stronger dollar, are still suffering. The mining sector shed 12,000 jobs last month, while manufacturing contracted by 29,000.
In a speech in New York earlier this week, Fed Chair Janet Yellen also noted that many workers who would like full-time jobs are stuck in part-time positions. In addition, the growth in the nation's labor force in recent months suggests that many workers are still finding their way back to the job market following the worst recession in generations.
The share of workers in the labor force fell to a nearly 40-year low of 62.4 percent in September. Since then, it has rebounded to 63 percent, the fastest pace of growth in more than two decades.
“I still continue to personally believe there’s a little more slack in the labor market than one would surmise by looking at the unemployment rate alone,” Yellen said.
The U.S. economy is not out of the woods, however. Another bout of financial volatility could still threaten the progress of the recovery, and central bank officials have limited scope to combat a domestic slowdown because interest rates are already so low and its balance sheet so large. The Fed cuts its benchmark interest rate to help stimulate the economy and raises it when the economy is overheating.
In her speech, Yellen highlighted the need to be cautious before hiking rates again. Her comments fueled a stock market rally earlier this week and helped bring down the dollar, two factors that should boost U.S. growth and provide continued momentum for the job market.
“As long as the job market continues to expand, you can argue that the economy will be just fine,” said Brad McMillan, Chief Investment Officer for Commonwealth Financial Network. “If employers are confident enough to hire, and workers have jobs and money to spend, we simply can’t get into all that much trouble.”