U.S. Adds More Jobs Than Expected in March as Unemployment Falls

Employers added 178,000 jobs in March, exceeding expectations, according to data released Friday by the U.S. Department of Labor. The unemployment rate declined to 4.3 percent, reflecting continued labor market stability.

The March gains followed a revised loss of 133,000 jobs in February, which was worse than initially reported. January job growth was revised upward to 160,000 positions, higher than earlier estimates, The Washington Post reported.

Economists said the data reflects ongoing volatility in the labor market. Daniel Zhao, chief economist at Glassdoor, said, “We are on a bit of a roller coaster with job market data.”

Zhao said uncertainty remains tied to global events, including the conflict involving Iran and rising energy prices. “There are sources of uncertainty looming on the horizon — the most obvious one being the U.S.-Iran war and the prospect of rising energy prices,” he said.

The March data captured a period after U.S. military action involving Iran but before broader supply disruptions took hold. Economists said rising fuel costs could weigh on hiring in the months ahead.

The Trump administration highlighted the jobs report as a positive sign for the economy. Labor Secretary Lori Chavez-DeRemer said, “America’s economic comeback is on full display: Job growth smashed expectations.”

Health care led job growth, adding 76,000 positions, according to the report. Employment also increased in manufacturing, construction, leisure and hospitality, social assistance, and transportation and warehousing.

The manufacturing sector added 15,000 jobs in March, marking its strongest gain since late 2023. The sector has faced declines over the past year but showed improvement in the latest data.

Some sectors lost jobs during the month, including the federal government and finance. The federal workforce declined by 18,000 positions and is down significantly from its peak in 2024.

Average hourly wages rose 3.5 percent over the past year to $37.38, according to the report. Wage growth continues to outpace inflation, though economists said that gap has narrowed.

Nicole Bachaud, an economist at ZipRecruiter, said slowing wage growth could affect workers’ purchasing power. “We’re converging on a point where soon workers are going to feel like they have less money at the end of the day,” she said.

The decline in the unemployment rate was partly driven by a drop in labor force participation. The share of Americans working or seeking work fell to its lowest level since 2021.

Earlier labor market data showed hiring had slowed to a multi-year low. Job openings declined by more than 350,000, according to a separate report.

Federal Reserve Chair Jerome Powell said job growth levels reflect broader demographic trends. “There’s zero net job creation in the private sector,” Powell said.

Powell said low labor force growth has reduced the need for strong job creation to maintain stable unemployment levels. He noted that the U.S. is experiencing trends similar to countries with aging populations.

New unemployment claims remain near a two-year low, according to additional Labor Department data. Layoffs have remained limited despite signs of a slowing labor market.

Economists said rising energy costs could weigh on future hiring. Bachaud said higher fuel prices are likely to affect consumer spending and business costs, which could slow job growth.