WASHINGTON (REUTERS) - The United States employment increased solidly in March and wages rebounded, signs of economic resilience that could allow a cautious Federal Reserve to gradually raise interest rates this year.
Nonfarm payrolls increased 215,000 last month, the Labor Department said on Friday. Data for January and February was revised slightly down to show 1,000 fewer jobs created than previously reported.
Average hourly earnings increased seven cents. While the unemployment rate rose to 5.0 per cent from an eight-year low of 4.9 per cent, it was because more Americans continued to return to the labour force, a sign of confidence in the jobs market.
The labour market has largely shrugged off slowing global economic growth, a robust U.S. dollar that has hurt manufacturing exports, and cheap oil prices, which have hit energy sector profitability.
Fed Chair Janet Yellen said on Tuesday that slowing world growth and lower oil prices posed a downside risk to the U.S. 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 rises this year. The U.S. central bank raised its benchmark overnight interest rate in December for the first time in nearly a decade.
Though employment gains have slowed after averaging 282,000 jobs per month in the fourth quarter, there is little labour market strain from the global slowdown, which helped to ignite a massive stock market sell-off at the start of the year.
Wages increased last month, with average hourly earnings rising 0.3 per cent. That lifted the year-on-year earnings gain to 2.3 per cent from 2.2 per cent in February.
Economists say a growth rate of between 3.0 per cent and 3.5 per cent in wages is needed to lift inflation to the Fed's 2.0 per cent target. Though the Fed's preferred inflation measure is currently at 1.7 per cent, Ms Yellen has expressed skepticism over the sustainability of gains, citing transitory factors.
Employment gains in March were broad-based. But manufacturing lost 29,000 jobs, the largest number since December 2009, despite signs of stabilization in the factory sector.
Mining purged 12,000 more jobs last month. Mining payrolls have declined by 185,000 jobs since peaking in September 2014, with three-fourths of the losses in support activities.