The U.S. job market is showing signs of softening as rising interest rates and slowing economic growth begin to take their toll on hiring.
Employers added 236,000 jobs in March, according to a report from the Labor Department Friday. That’s down from 326,000 jobs that were added the month before.
The unemployment rate dipped to 3.5% in March, from 3.6% in February, even as 480,000 new people joined the workforce.
“The jobs market shifted to a lower gear in March,” said Nela Richardson, chief economist for the payroll processing company ADP.
Despite the slowdown, employers are still adding workers faster than they did in 2019 — the year before the pandemic — when monthly job growth averaged 163,000.
Leisure and hospitality was once again a top growing sector in March, with 72,000 new jobs, including 50,000 in bars and restaurants. By contrast, retailers shed 15,000 jobs. Construction companies and factories also saw modest declines in employment.
“It’s uncomfortable when we see the labor market weaken, but given how vexing inflation has been over the last two years, some softening of the labor market is necessary,” said Sarah House, senior economist at Wells Fargo.
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