March Jobs Report Commentary from MBA's Mike Fratantoni

The following is MBA SVP and Chief Economist Mike Fratantoni’s reaction to this morning’s U.S. Bureau of Labor Statistics report on employment conditions in March.  

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“The job market is still quite strong, with employment gains at 303,000 for March, well above what would be expected at this point in the cycle. Although the job gains remain concentrated in sectors like health care, government, and leisure and hospitality, there was also a pickup in construction hires, a positive for the housing market given the lack of supply.  On net, the prior two months job gains were revised up by 22,000.

“The unemployment rate fell just enough for the reported number to round down to 3.8%, helped by stronger reported employment growth in the household survey.

“Wages increased at a 4.1 percent rate over the past year, down a bit from earlier this year, but still a more rapid pace than is likely to be maintained over the course of this year. Although job openings have decreased somewhat, there is still strong demand from employers in some sectors of the economy.

“Our view is that recent data continues to point to a slowdown in economic growth in 2024, but the odds of a recession are much reduced given the resilient job market, which will provide support for consumer spending. This report will bolster the case for the FOMC to hold off on any rate cuts in the near term, which will keep mortgage rates elevated for now.”