US economy breaks expectations to add 916,000 jobs as recovery surges

Unemployment fell to 6 per cent as the economy was buoyed by an increase in vaccinations

US job growth exceeded expectations and boomed in March at the fastest pace since last August, adding 916,000 jobs, with unemployment falling to 6 per cent, the Labour Department said on Friday.

The new numbers shattered the outlook of economists, who were expecting an increase of 660,000 jobs.

With a 6 per cent unemployment rate, the US economy is making a return to the 50-year lows seen before the pandemic, according to the Bureau of Labour Statistics.

The surge in jobs and the drop in unemployment is fuelled by more Americans being vaccinated and lockdowns easing in many states.

By Thursday, the US had administered a total of 154 million vaccines. President Joe Biden has also upped his new goal from administering 100 to 200 million vaccine doses during his first 100 days in office.

Payrolls also saw an increase. January’s payroll change was revised to 233,000 from the 166,000 previously reported, and February's job growth totalled 468,000, up from the 379,000 previously reported.

Leisure and hospitality sectors added the most, rising to 280,000 jobs, and construction firms came second, with 110,000 jobs.

Regular US stock trading is not taking place on Friday in observance of the Good Friday holiday but the Treasury yields rose on Friday morning buoyed by the payroll news, rising 1.6 basis points 1.695 per cent, while the 2-year note rate was up a basis point to 0.170 per cent.

Technology stocks led the advances on Thursday, and the Nasdaq outperformed with a gain of 1.8 per cent.

Mr Biden praised the job growth but warned against becoming complacent.

"We saw the economy gain traction in March as the American Rescue Plan moved and got passed, bringing new hope to our country," the president said. "Today's report also reflects the progress we've made on my other key priority: getting the American people vaccinated."

But Mr Biden said that this could be reversed if the jobs and infrastructure plan is not passed or if people lower their guard against Covid-19.

"In the face of this great news, I need to also make this clear and direct statement to the American people: The progress we have worked so hard to achieve can be reversed," he said.

The White House, following Mr Biden’s remarks, sent out a fact sheet praising the administration’s plan.

It quotes a report from Moody's Analytics which projects that the US economy will create 19 million jobs over the next decade if Congress passes the American Jobs Plan.