U.S. job growth unexpectedly jumped in January, underscoring the resilience of the labor market even in the face of high interest rates and stubborn inflation.

Employers added 303,000 jobs in March, the Labor Department said in its monthly payroll report released Friday, easily topping the 200,000 gain forecast by LSEG economists. The unemployment rate inched lower to 3.8%.

The Federal Reserve signaled it is closely watching the report for evidence that the labor market is finally softening after months of solid job gains as policymakers try to ensure that inflation progress does not stall. The consumer price index has cooled considerably in recent months but remains above the Fed's preferred 2% target, despite 11 rate hikes in the span of 16 months.

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The labor market has remained historically tight over the past year, defying economists' expectations for a slowdown. 

This is a developing story. Please check back for updates.