Hiring across the US increased in March after falling sharply the previous month, as employers added 178,000 jobs, according to new data from the Labor Department.
In numbers
The March jobs report beat consensus estimates of last month’s gains by 60,000, according to FactSet.
The unemployment rate fell to 4.3% in March, from 4.4% the previous month.
The health care sector helped boost job growth, with a gain of 76,000 wages in March. That came after the nurses get back to work following strikes earlier in the year. The construction and transportation and warehousing industries also saw gains, adding 26,000 and 21,000 jobs respectively.
Government employment continued to decline, falling by 18,000, according to the Labor Department.
The latest payrolls mark a sharp turnaround from February, when employers abruptly cut jobs amid signs of a weakening labor market. Friday’s report revised the decline to 133,000, much larger than the 92,000 initially reported. February’s weak numbers were due in part to strikes in the health care industry and winter storms.
Job growth has been flat this year, with employers adding 68,000 jobs per month from January to March.
What economists say
March’s strong numbers show there are pockets of strength in the labor market, economists noted.
“This is a big Friday for the labor market, with a low unemployment rate and a large number of people being paid,” Olu Sonola, head of the US economy at Fitch Ratings, said in an email. “The impact of the health care strike was clearly visible, but the good news went beyond that, with construction and manufacturing also providing solid profits.”
While Friday’s jobs report pointed to a rebound from last month, Americans are giving a bleak view of the strength of the labor market. A recent Gallup poll from the end of 2025 found that 72% of Americans said it was a bad time to find a job, up from 54% last year.
Some new employees have a hard time to find a jobas concerns grow about the impact of artificial intelligence on the labor market. Federal Reserve Chairman Jerome Powell just discussed economics group at Harvard University, telling students, “there is no denying that it is a difficult time to enter the labor market,” adding that there will be long-term opportunities.
High energy prices because of Iran was there could push firms to curb hiring later this year and increase job losses, James McCann, senior investment strategist at Edward Jones, said in an email ahead of the latest government jobs reading.
Fuel costs have soared since the US and Israel attacked Iran on February 28, with domestic petrol prices jumping above $4 a liter and oil over $100 a barrel.
Work is still quiet for now. The latest report from outsourcing firm Challenger, Gray & Christmas found that employers cut nearly 60,000 jobs in March, up from February but down year-on-year.
Impact on interest rates
While March’s job gains indicate a return to a strong labor market, analysts also point to longer-term issues such as slower job creation, a shrinking workforce and a growing share of long-term unemployed workers.
Stephen Brown, chief North American economist at Capital Economics, said in a research note that stronger-than-expected earnings in March reflected a shift in strike and weather effects that dampened hiring in February, rather than a stronger pace.
“The broad story of 2026 so far has been one of improvement rather than acceleration,” Laura Ullrich, director of economic research for Indeed Hiring Lab, said in a statement.
March’s job numbers will keep the Federal Reserve on track to halt rate cuts, according to many analysts.
At their end meeting in MarchFed officials held the rate steady, while indicating that they still expect to give the same rate in 2026. However, many economists predict that the central bank will avoid reducing this year completely.
The March report “reduces pressure on the Federal Reserve to act immediately and instead lets them look ahead to prepare for the consequences of the US-Iran war and rising energy prices, which could threaten its dual mandate,” Glassdoor chief economist Daniel Zhao said in a statement.
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