Biden says 'America is back to work' after unemployment drops

US economy added 431,000 jobs last month as unemployment hits near pre-pandemic level of 3.6 per cent

President Joe Biden said 'America is back to work' after the unemployment rate dropped to a near pre-pandemic level in March. Bloomberg
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The US economy has gone from "being on the mend to being on the move", President Joe Biden claimed after the country's unemployment rate fell to close to where it was before the Covid-19 pandemic.

The Labour Department reported on Friday that the unemployment rate fell more than analysts forecast in March to 3.6 per cent, a hair above its February 2020 level of 3.5 per cent, while the economy added 431,000 jobs in the month.

"What it means is clear, very clear: America is back to work, Mr Biden said. "And that's good news for millions of families who have a little more breathing room, and the dignity that comes from earning a paycheck."

Though the hiring total was slightly below analysts' forecasts, it was nonetheless a strong figure that underscored how far the economy has come since the pandemic started two years ago.

Mr Biden said "the job is not finished", referring to soaring prices as the US battles a 40-year high inflation.

"We need to do more to get prices under control," he said.

The Federal Reserve this month raised interest rates by a quarter percentage, part of its process of tackling higher prices. Fed Chair Jerome Powell said the central bank is ready to act aggressively.

The latest report showed key markers of labour market health had made a full recovery after the catastrophe brought on by the pandemic, which cost more than 20 million people their jobs and sent the unemployment rate up to 14.7 per cent in April 2020.

Last month, the number of unemployed people fell to six million, just above its 5.7m level before the pandemic, while the number of people whose employment ended involuntarily or who completed a temporary job came in at 1.4m, also close to where it was in February 2020.

The Labour Department also revised upwards the healthy jobs gains reported in January and February, saying they were a combined 95,000 higher than first reported.

A wide range of industries hired last month, including leisure and hospitality, the sector encompassing the bars and restaurants hit hardest by the pandemic's layoffs.

That industry added 112,000 positions, while professional and business services firms gained 102,000 jobs in March, retailers added 49,000 positions and manufacturing employment rose by 38,000.

The labour force participation rate, indicating the share of people employed or looking for work, ticked up slightly to 62.4 per cent, a post-pandemic high but still a percentage point below February 2020.

Nonetheless, there was still ground to be recovered. The number of employed people was still 1.6m short of its pre-pandemic level, the data said, while employment in leisure and hospitality is 1.5m jobs lower than before the pandemic.

The recovery was also not being felt equally, with unemployment for white workers hitting 3.2 per cent in March, but coming in at 6.2 per cent for black Americans and 4.2 percent for Hispanic workers, though the rates for each group decreased from the month prior.

Economists viewed the data as reinforcing the Fed's commitment to raise interest rates by half a percentage point at its meeting next month, double the hike it announced when it began hiking in March.

"Looking ahead, we expect job creation will settle into a slower but still healthy pace later this year as the economy feels the pinch from soaring inflation and tighter financial conditions," Kathy Bostjancic of Oxford Economics said.

Agence France-Presse contributed to this report

Updated: April 01, 2022, 6:05 PM