The U.S. labor market shook off February’s stumble in March, and then some. Employers added 178,000 jobs, far above the 60,000 economists expected, while the unemployment rate slipped to 4.3 percent from 4.4 percent. The bounce was broad enough to calm some recession chatter, but not broad enough to erase the bigger worry: hiring still averaged just 68,000 jobs a month in the first quarter.
Health care led the rebound with 76,000 new jobs after nurses returned from earlier strikes, and construction plus transportation and warehousing also posted solid gains. That said, part of March’s strength looks like a reset from February’s weather and strike distortions rather than a fresh surge in demand, as February’s payroll drop was revised to 133,000, much worse than first reported. Federal payrolls kept shrinking, falling by 18,000, a reminder that government hiring is still a drag.
For the Federal Reserve, the report buys time. March’s numbers make an immediate rate cut even less likely, especially with economists warning that higher energy prices tied to the U.S.-Iran conflict could cool hiring later this year and push up layoffs. Gasoline has moved above $4 a gallon and oil has topped $100 a barrel, a painful mix for households and a potential headwind for employers already feeling their way through a slower-growth year.
Sentiment may not catch up quickly. Americans still say it is a bad time to find work, younger workers are struggling more, and concerns about artificial intelligence are layering onto the usual job-market anxiety. The labor market has not cracked, but it is no longer the effortless post-pandemic engine it once was.
