US economy added over 300K jobs, but are wages keeping up?

The jobs report for March came in hotter-than-expected with over 300,000 jobs added, exceeding Wall Street expectations. Despite jobs figures topping estimates, are wages keeping up at the same pace?

Yahoo Finance Markets Reporter Josh Schafer joins The Morning Brief to break down the March jobs print and take a deeper dive into wages and what it means for the labor market.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

Editor's note: This article was written by Nicholas Jacobino

Video Transcript

- The March Jobs Report coming in much hotter than expected today. More than 300,000 jobs were added last month during the month of March, but what are wages telling us? To break down what you may have missed in this report, Yahoo Finance's very own Josh Schafer is here. Yeah, yeah, forget about the headline number.

JOSH SCHAFER: People are still getting paid, Brad.

- How much are they making? Yeah.

JOSH SCHAFER: People are still making money out there. They're making a little bit less money than they-- or they're seeing slower increases than they were seeing before. That's sort of the takeaway from that 4.1% number down from 4.3%. Remember we saw the big spike in January. I believe that number was 4.5% year-over-year growth. And the reason I'm highlighting wages here, guys, is because when you have a hot number like this with a big increase in the non-farm additions, a big increase overall-- or sorry, unemployment coming down.

You have this strong picture. People are going to look, OK, are wages going up significantly too. And then we're going to be talking a lot about inflation. I think this is sort of the balancing piece of this report that stood out to me. At least we didn't have a massive uptick in wages with the hot number for everyone to freak out about the print being too hot. I don't know that was--

- Yeah, no, I think you're right to point that out. It's kind of the silver lining in this report, I guess, compared to what it could have been. But still though, when you take a look at the fact that it is a 4.1% increase on a year-over-year basis, 3/10 of a move to the upside or growth, I should say, on a month-over-month basis. Is that though still way too hot for the Fed given how resilient the economy is and given how the fact that the jobs market remains, once again, to be holding up much stronger than we anticipated?

JOSH SCHAFER: I was listening to Dana Peterson on the show a little while ago, and it seemed like she said, yes. That number 4.1% and 4.3% is not a number people are particularly happy with in the long run, but I also think it's the March Jobs Report. We're sitting here in April. I don't think anyone woke up this morning thinking we were going to get some number that was going to be in pace with 2% inflation.

It's back to the long-term story here of we're slowly getting there. We're slowly getting there. And so every month, you want to see that number come down a little bit, but the number is not suddenly going to go down to 3.5%, which some economists have highlighted for year-over-over growth that they want to see to be on track with 2% inflation. Maybe we'll be talking about that number in six months.

Maybe we'll be talking about that number in a year. I have no clue, but it's going to take time to get there. And so I would save for now, at least it's coming down. And then the other thing I liked in the report too was the labor force participation rate coming back up. You also had hours work coming back up. Some supply-side factors there, and we know Powell recently talked about that and started highlighting maybe we're getting help on the supply side here.

So maybe that's a positive story overall for the US economy, and those were some of the things that sort of stuck out to me, rather than-- I get it. The Inflation story and Fed rate cuts. We're going to see those Fed rate cut futures move today. It might move all the way off June. It's starting to move off June, moving to July. It will be OK, Brad, if we wait till July.

- I think that'd be fine. I mean, as long as people keep making money.

JOSH SCHAFER: I said to Jared, if they pushed to September, we can take the summer off.

- Really?

- Not bad then. Well, the Fed swaps right now are-- they're fully shifted. They're fully pricing in. They have the full pricing of a rate cut now to September.

JOSH SCHAFER: There we go.

- So there we go.