US jobs boom raises doubts about rate cuts

Employers in the US added more than 300,000 jobs last month - the biggest gain in almost a year - as the boom in the world's largest economy continued.

The jobless rate fell to 3.8%, as most sectors, including health care, construction and the government added roles, the Labor Department said.

It marked another month of stronger-than-expected growth. Economists had forecast job gains of about 200,000.

Analysts said the strong figures could delay cuts to US interest rates.

The US central bank's key interest rate is currently at the highest level in more than two decades, in a range of 5.25%-5.5%.

Analysts expect the Federal Reserve to start cutting rates sometime this year to avoid a harsh slowdown triggered by high borrowing costs.

But the strength of the labour market means the Fed is not expected to cut rates anytime soon.

"The blockbuster 303,000 increase in non-farm payrolls in March supports the Fed's position that the resilience of the economy means it can take its time with rate cuts, which might now not begin until the second half of this year," said Paul Ashworth, chief economist at Capital Economics.

The Fed raised interest rates sharply in 2022 to try to slow the economy and ease the pressures that were pushing up prices at the fastest rate in decades.

Officials have said they want to see more evidence that price inflation is returning to the 2% pace considered healthy before they start to lower rates.