The U.S. added close to half a million jobs in March and the unemployment rate fell by more than expected, highlighting a robust labor market that’s likely to support aggressive Federal Reserve tightening in the coming months.

Nonfarm payrolls increased 431,000 last month after an upwardly revised 750,000 gain in February, a Labor Department report showed Friday. The unemployment rate fell to 3.6%, near its pre-pandemic low, and the labor force participation rate ticked up. Wage gains accelerated.

The median estimate in a Bloomberg survey of economists called for a 490,000 advance in payrolls and for the unemployment rate to fall to 3.7%.

Treasury yields edged higher, S&P 500 futures pared gains and the dollar strengthened after the release.

The data suggest that the labor market recovery is continuing at a robust pace as employers have better success filling a near-record number of positions. Inflation, shrinking excess household savings and solid wage growth are factors that could attract more Americans to jobs in the coming months. Covid has also become less of a factor as states broadly lift restrictions.

Fed officials, including Chair Jerome Powell, have said in recent weeks that they would support more aggressive monetary policy to curb decades-high inflation, including a possible 50-basis-point hike at the next policy meeting in May. Central bankers have repeatedly pointed to a strong labor market as one reason that the U.S. economy can handle a series of interest rate hikes that’s expected to extend into next year.

Friday’s report showed average hourly earnings rose 0.4% from February and 5.6% from a year ago, the most since May 2020. However, inflation -- at the highest since the early 1980s -- is outpacing wage growth, effectively dealing a pay cut to many Americans and starting to dent consumer demand.

Leisure and hospitality accounted for a quarter of the payroll gains. Professional and business services, retail trade and education and health services also posted solid advances.

The labor force participation rate -- the share of the population that is working or looking for work -- edged higher to 62.4%, and the rate for workers ages 25-54 rose to a two-year high. The overall participation rate remains one percentage point lower than before the pandemic, due in part to lingering impacts including early retirements, shifting child care arrangements and public health concerns.

--With assistance from Chris Middleton, Reade Pickert and Liz Capo McCormick.

This article was provided by Bloomberg News.