The Fed eyes a hot labor market as unemployment nears prepandemic levels.

By Jeanna Smialek

Federal Reserve officials are tasked with fostering “full employment,” and while it has been difficult to guess what that means as the economy recovers from huge job losses at the start of the pandemic, March hiring data seemed likely to reaffirm to policymakers that the labor market is running hot.

Now, central bankers are hoping conditions settle into a more sustainable balance.

The jobless rate declined to 3.6 percent in March from 3.8 percent in February, data released Friday showed. Unemployment is rapidly closing in on the 3.5 percent unemployment rate that prevailed before the pandemic.

The unemployment rate continued to fall in March.

The share of people who have looked for work in the past four weeks or are temporarily laid off, which does not capture everyone who lost work because of the pandemic.

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