Topline
As waves of layoffs ripple through the long-booming labor market, the Labor Department’s jobs report on Friday showed a continued slowdown in employment—adding to a slew of signs this week that the economy may be cooling more quickly than believed, potentially risking the hard landing Federal Reserve officials have long tried to avoid.
Key Facts
Total employment increased by 236,000 in March—in line with economist expectations and marking the lowest monthly gain since December 2020, according to data released Friday by the Labor Department.
Despite growing reports of corporate layoffs hitting the nation’s largest employers, the unemployment rate ticked down to 3.5% after it unexpectedly rose to 3.6% in February from a 54-year low of 3.4% in January.
The report comes after the Labor Department on Thursday made revisions to its latest data on jobless claims, indicating Americans filed an additional 142,000 first-time unemployment claims over the past three weeks—up 24% from levels previously reported.
The revisions fueled recession concerns that intensified this week, with “every major data point”—including jobless claims, manufacturing activity and construction spending—signaling the economy is slowing down and pushing some experts to worry it may be slowing down too quickly, says Sevens Report founder Tom Essaye.
“More likely than not, a recession is underway now,” Comerica Bank chief economist Bill Adams said in a morning note, noting the updated Labor Department data means the uptick in continued jobless claims over the last six months is about as large as increases in recessions dating back to the 1970s.
Key Background
Amid waves of layoffs hitting some of the nation’s largest tech employers, the unemployment rate unexpectedly ticked up in February despite the labor market gaining significantly more jobs than expected. Over the past month, the layoffs have spread to other industries, with retail giant Walmart and fast-food chain McDonald’s among those cutting hundreds of jobs. On Thursday, outplacement firm Challenger, Gray & Christmas reported employers have cut roughly 270,400 jobs so far this year—a 396% jump from the same period in 2022.
Crucial Quote
“A rising trend in claims has been a key missing part of the labor market story, but it is now clear layoffs are increasing,” Pantheon Macro chief economist Ian Shepherdson said in a Thursday note. “These data alone won’t stop the Fed from raising rates again in May, but they are a warning sign that should not be ignored.”
‘Economy Is Unwell’: Job Growth Unexpectedly Slows As Employers Scale Back Wages (Forbes)
Job Cuts Are Up Almost 400% This Year As Jobless Claims Rise (Forbes)
2023 Layoff Tracker: Walmart Cuts 2,000 Workers (Forbes)
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