March US Jobs Report: Hiring Rebounds With a Strong 178,000 Rise in Payrolls

The US economy showed a strong jump in hiring in March as it added 178,000 new jobs, according to the latest report from the Bureau of Labor Statistics.

The unemployment rate edged down to 4.3% in March from 4.4% in February.

The increase in hiring for March came in well above economists’ expectations. Nonfarm payroll employment had been forecast to show an increase of 60,000 versus a decline of 92,000 originally reported in February, according to FactSet. That February loss has since been revised down to 133,000. Meanwhile, the unemployment rate had been forecast to remain steady at 4.4%.

“We shouldn’t overreact to a single month’s worth of data, but the labor market does appear improved as of [the March] jobs report,” says Preston Caldwell, senior US economist at Morningstar.

Economists noted that the jobs data would not have captured much of any potential impact from the Iran war and oil price hike on the economy.

“Although most of this data is from the period prior to the war, it establishes a baseline of a resilient economy, with better than expected job growth and a lower unemployment rate,” Chris Zaccarelli, chief investment officer for Northlight Asset Management, wrote in a note Friday.

March Jobs Report Key Stats

• Total nonfarm payrolls rose by 178,000 after falling by 133,000 in February.
• The unemployment rate ticked down to 4.3% in March from 4.4% in February.
• In March, average hourly wages rose by 9 cents, or 0.2%, to $37.38.

Healthcare employment grew by 76,000 in March, the BLS said. That increase was in part due to an increase of 35,000 in offices of physicians as striking workers returned to their jobs.

Caldwell notes that manufacturing, retail, and transportation also showed hiring gains. “However, these results don’t seem likely to persist given slowing growth in private construction and consumer goods purchases,” he says.

Jobs Data Seen Supporting Fed Keeping Rate Moves on Hold

Even before the strong jobs report, expectations were widespread that the Federal Reserve will be keeping interest rates unchanged for the foreseeable future. With the jump in oil prices caused by the Iran war expected to fuel inflation, interest rate cuts that had been predicted for 2026 are now seen off the table, and the bond market has now priced in small odds of an interest rate increase later this year. The Fed has held the federal-funds rate target steady at 3.50%-3.75% since it eased monetary policy in October.

“This job growth rebound may prove ephemeral, but for now it will add to the Fed’s confidence in keeping the federal-funds rate unchanged in coming months,” Caldwell says. “The Fed is set to refrain from further rate cuts until the oil price shock from the Iran conflict is receding and until it seems the shock will not leave a residue of persistent inflationary momentum in the broader economy.”

When it comes to the Fed raising rates, “while we consider it unlikely to occur, further job gains of this magnitude would certainly open the door to rate hikes in 2026,” Caldwell says.

Zaccarelli wrote that while the strong jobs data could make the Federal Reserve less likely to lower interest rates, “it is an environment in which corporate profits can remain elevated and can help to explain why the stock market hasn’t fallen as much as would otherwise be expected, given all of the shocks it has had to absorb.”