Strong Job Market Continues to Thrive
In March, the U.S. job market continued its impressive streak, marking the 39th consecutive month of job gains. Employment growth surged to a 10-month high with the addition of 303,000 positions, while the unemployment rate dropped to 3.8 percent.
Diverse Sectors Driving Growth
Key sectors driving this growth included health care, government, construction, and leisure and hospitality. Particularly noteworthy were the gains in health care and leisure and hospitality, which are expected to alleviate staffing shortages in these industries.
Immigration's Impact on Labor Market
Immigration has also played a significant role in bolstering the labor market, with the unemployment rate among foreign-born residents reaching 3.6 percent in March.
Government Hiring Trends and Work Dynamics
Government hiring, in particular, saw a notable increase, with the sector adding 71,000 jobs, comprising nearly one-fourth of all jobs added last month. This growth was primarily driven by hiring in local government non-education segments. Interestingly, there has been a decline in remote work among government employees, with most now spending an average of just 1.3 days per week working from home.
Leisure and Hospitality Sector Rebound
The leisure and hospitality sector, including restaurants and bars, experienced a welcomed reversal of pandemic-related job losses, adding 49,000 new roles in March. This brought the total job count in the sector just above the pre-pandemic benchmark set in February 2020.
Construction Sector Growth and Policy Impact
In the construction sector, approximately 39,000 jobs were created in March, nearly double the average monthly gain over the past year. Federal policies aimed at infrastructure have provided a significant boost to construction activity, particularly in nonresidential specialty trades.
Monetary Policy and CRE Investment
Positive inflation data may prompt interest rate cuts, which could benefit commercial real estate (CRE) investment. Cyclical sectors like hospitality and construction have demonstrated resilience to higher borrowing costs, supporting the possibility of a soft landing. While the Federal Reserve has yet to cut interest rates, expectations for a lower range by the end of 2024 persist. This, coupled with realigning buyer and seller pricing expectations, is expected to reassure lenders and support CRE investment.
Comments