US Job Growth Rebounds in the March as Unemployment Falls to 4.3%

US Job Growth Rebounds in March as Unemployment Falls to 4.3%

US employers added 178,000 jobs in March, rebounding from two months of weak or negative growth and pushing the unemployment rate down to 4.3 per cent, according to Bureau of Labor Statistics data released Friday.

The gain exceeded all estimates in a Bloomberg survey and handily beat the Dow Jones consensus forecast of 59,000, offering a reprieve after February’s revised 133,000 decline. However, underlying details suggest the labour market remains softer than the headline unemployment figure implies.

The March jobs report reflects a labour market stabilizing rather than accelerating. Health care drove much of the growth, adding 76,000 positions including 35,000 returning workers from a strike at Kaiser Permanent that had depressed February’s numbers. Construction added 26,000 jobs, while transportation and warehousing gained 21,000. On the weaker side, the federal government lost 18,000 jobs and financial activities shed 15,000.

The unemployment rate’s drop to 4.3 per cent came with an important caveat: the labour force shrank by 396,000 people. The share of working-age Americans either working or looking for work fell to 61.9 per cent, the lowest since November 2021. A broader measure of unemployment that includes discouraged workers and those working part-time for economic reasons edged up to 8 per cent.

Wages rose less than expected, with average hourly earnings increasing 0.2 per cent for the month and 3.5 per cent from a year ago the smallest annual gain since May 2021. Economists had forecast 0.3 per cent and 3.7 per cent respectively.

“The bottom line is March was somewhat encouraging, but it’s been a rocky year for the labour market with almost no hiring since last April,” Heather Long, chief economist at Navy Federal Credit Union, told CNBC. “The March data will keep the Federal Reserve on hold, but no one is declaring victory yet. It’s likely to be a tough spring for job seekers.”

Market Snapshot (As of report release)

This coverage is for informational purposes only and does not constitute financial advice.

For the average reader, slower wage growth means take-home pay is rising at its weakest pace in nearly four years a trend that helps cool inflation but also squeezes household budgets. Combined with surging energy prices linked to the Iran war, the report gives the Federal Reserve little reason to cut interest rates. Fed futures priced a 77.5 per cent probability the central bank will keep rates unchanged through the end of the year following the release, according to CME Group’s FedWatch tool.