U.S. jobs report beats expectations in March as wages increase steadily

WASHINGTON (Reuters) -- U.S. employers hired far more workers than expected March while raising wages, suggesting the economy ended the first quarter on solid ground and potentially delaying anticipated interest rate cuts from the Federal Reserve this year.

Nonfarm payrolls increased by 303,000 jobs last month.

Labor Department's Bureau of Labor Statistics said in its closely watched employment report on Friday. Data for February was revised slightly lower to show 270,000 jobs added instead of 275,000 as previously reported.

Economists polled by Reuters had forecast 200,000 jobs, with estimates ranging from 150,000 to 250,000.

The economy is outshining its global peers, despite 525 basis points worth of rate hikes from the U.S. central bank since March 2022 to quell inflation. Economists say most businesses locked in lower borrowing costs prior to the Fed's tightening cycle, providing some insulation from higher rates and allowing them to keep their workers.

Household balance sheets are mostly healthy, helping to support consumer spending. The labor market has also benefited from a rise in immigration over the past year. Easing financial conditions are boosting hiring in interest rate-sensitive industries like construction, which should provide a base for job growth even as payroll gains are expected to slow.

The National Federation of Independent Business' measure of small businesses planning to add jobs over the next three months fell in March to the lowest level since May 2020. It is seen as a good predictor of payroll gains. Employment in some sectors such as health care, leisure and hospitality as well as state and local government remain below pre-pandemic trends.

Average hourly earnings rose 0.3% in March after gaining