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March Unemployment Rate Unchanged At 6.7 Percent

STEVE INSKEEP, HOST:

And we have some new jobs numbers this morning. The U.S. economy, we're told, added 192,000 jobs in March. That's according to the federal government, which also says the unemployment rate held steady - 6.7 percent. The labor market appears to be strengthening after being held back by severe winter weather. And we have more this morning from NPR's John Ydstie.

JOHN YDSTIE, BYLINE: Along with the relatively strong showing in March, job growth in the previous two months was revised up by 37,000 jobs. Jim O'Sullivan, chief U.S. economist at High Frequency Economics, says from a growth perspective, it was a pretty good report.

JIM O'SULLIVAN: When you look at the average for payrolls for the first quarter - 178,000 per month, including the revisions to January to February - I mean, those are pretty good gains.

YDSTIE: O'Sullivan says the unemployment rate did not tick down - as expected - because the labor force increased by half a million people. That suggests discouraged workers returning to the workforce because they see better prospects for getting a job. But O'Sullivan believes the unemployment rate will continue to decline steadily this year, as growth improves. One reason for that improvement, he says, is less drag from policies coming out of Washington.

O'SULLIVAN: I think the biggest change, compared with a year ago, is the fading of fiscal drag. Certainly in early 2013, you had a tax hike and of course, with the sequester as well so certainly, fiscal policy was quite negative for growth.

YDSTIE: O'Sullivan also thinks the consumer will play a more positive role this year. Although the average hourly wage slipped a penny in March, O'Sullivan says real income has been growing moderately. In addition, consumers are feeling wealthier because of rising home prices and a big run-up in the stock market. He says that should boost consumer spending, and support an increase in overall economic growth to around 3 percent this year.

O'Sullivan says today's report is also a win-win report from the perspective of the financial markets.

O'SULLIVAN: In the sense that it's actually a pretty good growth signal from the report but at the same time, it's not very threatening from an inflation perspective. So it kind of keeps the fed at bay.

YDSTIE: O'Sullivan expects the Fed to continue dialing back its bond-buying stimulus program, but to keep its benchmark interest rate low into next year.

John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

John Ydstie has covered the economy, Wall Street, and the Federal Reserve at NPR for nearly three decades. Over the years, NPR has also employed Ydstie's reporting skills to cover major stories like the aftermath of Sept. 11, Hurricane Katrina, the Jack Abramoff lobbying scandal, and the implementation of the Affordable Care Act. He was a lead reporter in NPR's coverage of the global financial crisis and the Great Recession, as well as the network's coverage of President Trump's economic policies. Ydstie has also been a guest host on the NPR news programs Morning Edition, All Things Considered, and Weekend Edition. Ydstie stepped back from full-time reporting in late 2018, but plans to continue to contribute to NPR through part-time assignments and work on special projects.

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