The U.S. economy added 178,000 jobs in March, far exceeding forecasts, even as the country faced rising oil prices due to escalating conflict with Iran. The unemployment rate dipped to 4.3%, down from 4.4% the previous month, according to the Bureau of Labor Statistics. Gains were strongest in health care, construction, transportation, and warehousing. Wage growth, however, slowed to 3.5% in March from 3.8% in February, falling below expectations. Revisions to prior months showed volatility: January's job gains were raised by 34,000 to 160,000, while February's were cut by 41,000 to a loss of 133,000 jobs. Combined, these two months saw a net loss of 7,000 jobs. The number of people outside the labor force who wanted work increased by 325,000, with 144,000 citing a belief that no jobs were available. Data collection ended on March 12, before the full economic impact of the war and soaring gasoline prices—now over $4 a gallon—could be assessed. The Atlanta Federal Reserve downgraded its real-time GDP estimate to 1.9%, from over 3% before the war. Economists at Pantheon Macroeconomics noted that consumers were already under pressure from weak income growth and low savings, and that higher gas prices would further dampen spending. Hiring in February fell to 3.1%, a rate last seen during the peak of the pandemic, while layoffs remained near historic lows. A CNN poll released Wednesday showed only 31% approve of President Donald Trump's handling of the economy, with approval on inflation at 27%, down from 44% a year ago. The Dallas Federal Reserve noted that due to reduced immigration and retiring baby boomers, the number of jobs needed each month to keep unemployment steady may now be close to zero. Laura Ullrich, director of economic research at Indeed, warned the current labor market stability is unlikely to persist.
When President Trump claims economic strength based on a 178,000-job gain, it masks a labor market fraying at the edges—wage growth is slipping, net job creation over two months was negative, and hiring rates are near historic lows. The fact that fewer jobs are now needed to keep unemployment stable isn't a sign of health, but of a shrinking workforce and stalled opportunities, which means this so-called resilience is built on increasingly thin foundations.
