The unemployment rate decreased from 4.4% in February. This decline is partly due to a drop in the labor force — those working and seeking employment — by 396,000 in March, resulting in fewer individuals competing for jobs.
Health care sectors contributed 76,400 jobs last month, significantly aided by the return of 31,000 Kaiser Permanente employees following the end of a strike in February. Manufacturing added 15,000 jobs last month, although it has lost jobs for 14 of the past 16 months. The construction industry saw an increase of 26,000 jobs, likely influenced by milder weather conditions last month.
Average hourly wages climbed by 0.2% from February and 3.5% from March 2025, aligning with the Federal Reserve’s annual inflation target of 2%.
The US job market has faced challenges over the past year, with the ongoing conflict in Iran complicating the outlook. Many economists believe that the effects of the war and rising energy prices may not be fully captured in the March job data.
“The data primarily reflects past trends and likely does not account for the recent surge in energy prices or other risks linked to the conflict in Iran,” noted Thomas Simons, chief US economist at the investment firm Jefferies, in a commentary.
Last year, an average of only 9,700 jobs were added monthly, marking the slowest hiring outside a recession since 2002. Companies have shown hesitance in hiring new workers, partly due to uncertainties stemming from President Donald Trump’s trade and immigration policies. One indicator released by the Labor Department on Monday suggested the weakest hiring since April 2020, during the height of COVID-19 lockdowns.
Moreover, companies have been hesitant to let go of their current employees, resulting in what economists refer to as a “no-hire, no-fire” situation that restricts access for younger job seekers. Concurrently, there are increasing concerns about artificial intelligence impacting entry-level positions.
New job growth is primarily concentrated in health care and social assistance (including day care and vocational rehabilitation centers). This sector accounted for more than half of the jobs created last month, reflecting the aging US population. A similar pattern was observed in Japan during the early 2010s, as noted by Vanguard economist Adam Schickling in his commentary prior to Friday’s jobs report.
“The larger-than-expected recovery in nonfarm payrolls in March mainly results from a reversal of the strike and weather-related setbacks that affected hiring in February, rather than indicating that the labor market is rapidly gaining strength,” stated Stephen Brown, chief North America economist at Capital Economics. He cautioned that higher oil prices pose a risk that “the decline in consumers’ purchasing power will negatively impact demand and, consequently, hiring in the near future.”
