For this and other sectors of the economy, I believe that demand will moderate because of higher interest rates. The solid performance of the economy through the first quarter in part reflects the tight labor market. The jobs report for March showed, once again, that we have a strong labor market, with 236,000 jobs created and the unemployment rate falling to 3.5 percent.
While still showing strong signs of growth, job creation did cool a bit from the hot readings we got in January and February. And we did get some encouraging news that the labor market is rebalancing. First, the labor participation rate increased for the fourth month in a row, so labor supply is slowly increasing.