Economy beat expectations in March with 916,000 new jobs as pandemic wanes, unemployment down to 6%

The economy beat expectations by adding 916,000 new jobs in March while the unemployment rate dropped to 6% as businesses recover from the COVID-19 pandemic, the Bureau of Labor Statistics reported Friday.

Forecasters had anticipated some 647,000 new nonfarm payroll jobs.

Demand for labor has increased as stores, restaurants, and other businesses keep emerging from the year-long slump brought on by pandemic restrictions. More and more people are getting vaccinated for COVID-19, the major factor at play in how quickly the economy can regain its pre-pandemic footing.

The growth also comes as the U.S. economy feels the effects of President Biden’s $1.9 trillion COVID-19 relief package, which provided many consumers eager to venture out of their homes with $1,400 stimulus checks to spend. The American Rescue Plan Act was the third round of stimulus money that went out to consumers, and many who saved the money from the previous stimulus checks may now be looking to go out and spend. Biden is seeking now to pass a $2 trillion infrastructure plan.

This month the Federal Reserve released projections for much stronger growth and lower unemployment rates than anticipated before. Officials projected that unemployment will fall to 4.5% and that real gross domestic product growth will be buoyed to 6.5% this year.

Despite the lofty forecasts, Fed Chairman Jerome Powell recommitted to holding interest rates steady at near-zero, an aggressive stance that some economists worry, when combined with Democrats' spending, could lead to too-high inflation. The Fed predicts that while inflation may bounce above the 2% threshold, it will later decline. The central bank wants to continue its easy-money polies until sustained inflation reaches 2% and U.S. employment rates have peaked.