 "Job, Hiring")
US employment increased solidly in March, underscoring the economy's resilience, but an influx of Americans into the labor market could temper nascent wage growth and keep the Federal Reserve cautious about raising interest rates.
Nonfarm payrolls increased 215,000 last month and the unemployment rate rose to 5.0 per cent from an eight-year low of 4.9 per cent, the Labor Department said on Friday. The jobless rate edged up as more people continued to enter or re-enter the labour market, a sign of confidence in the jobs market.
Average hourly earnings gained seven cents after slipping in February. The labour market has largely shrugged off slowing global economic growth, a robust US dollar that has hurt manufacturing exports, and the negative impact of cheap oil prices on the energy sector.
Economists see limited impact on monetary policy in the near-term from the strong jobs report, as the growing number of labor market entrants supported Fed Chair Janet Yellen's view that there was still hidden slack in the jobs market.
"The rise in participation is creating breathing room, allowing the Fed to react very slowly to a strong labor market," said Ethan Harris, global economist at Bank of America Merrill Lynch in New York.
The Fed also appears to be more focused on international developments. Yellen said this week that slowing world growth and lower oil prices posed a downside risk to the US economic outlook, adding that she considered it appropriate for policymakers to "proceed cautiously in adjusting policy."
Fed officials last month downgraded their economic growth expectations and forecast only two more rate hikes this year. The US central bank raised its benchmark overnight interest rate in December for the first time in nearly a decade.
Financial markets see a 30 per cent chance of a hike at the Fed's June policy meeting, a 50 per cent chance of such a move in September and a 64 per cent probability at the December meeting, according to CME FedWatch.
Economists polled by Reuters had forecast nonfarm payrolls increasing 205,000 in March and the unemployment rate holding steady at 4.9 per cent.
The economy created 1,000 fewer jobs in January and February than previously reported.
