The following is MBA SVP and Chief Economist Mike Fratantoni’s reaction to this morning’s U.S. Bureau of Labor Statistics report on employment conditions in March.

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“Employment increased by 178,000 in March. However, this topline number overstates the strength of this report. Much of the gain was a rebound in health care jobs following the resolution of a strike. The prior two months were revised down by a net 7000 jobs, with February revised to a 133,000 net loss. The 3-month average of 68,000 for the first quarter of the year is likely the best signal of a job market showing resilience amid a number of challenges.

Wage growth ticked down to 3.5% at an annual rate. This was despite the slight decrease in the unemployment rate to 4.3% in March from 4.4% in February. The decline in the unemployment rate was driven by a slight drop in the labor force participation rate, as both the number of employed and the unemployed decreased in the month. The decline in participation was reflected in an increase in the U-6 measure to 8% from 7.9% the month prior.

With inflation likely to pick up significantly due to the oil price shock, the FOMC is unlikely to cut rates unless the job market were to weaken precipitously. This job report shows a more resilient job market instead. As a result, we do not expect the FOMC to cut this year.”