U.S. non-farm payrolls rebound strongly in March, and the unemployment rate unexpectedly declines

U.S. nonfarm payrolls saw a strong rebound in March, with the unemployment rate unexpectedly falling, signaling that the labor market had stabilized as the Iran war began.

Data released Friday by the U.S. Bureau of Labor Statistics showed that nonfarm payrolls increased by 178k in March, the largest gain since the end of 2024, while revised figures showed a sharp drop in February employment. The March data beat forecasts from all economists surveyed.

After a major decline in February employment driven by strikes by more than 30k workers in the health care industry and unusually harsh cold weather, economists broadly expected a rebound in March jobs. This strong performance could reinforce the Federal Reserve’s focus on inflation risks, especially as the Middle East conflict pushes up energy prices.

Job growth was mainly driven by the health care sector, after strike issues involving Kaiser Permanente employees in California and Hawaii were resolved. However, the report showed employment grew across industries as well, with an indicator measuring hiring breadth rising to a level not seen in more than two years.

Employment in construction and in leisure and hospitality rebounded after falling in February, possibly reflecting a weather-related rebound. Manufacturing hiring recorded its strongest performance since late 2023.

After the data was released, U.S. Treasury yields rose. U.S. stock markets were closed for the Good Friday holiday.

February nonfarm payrolls were revised down by 133k, one of the largest declines since the pandemic. However, average monthly job gains in the first three months of this year were 68k, the best performance in nearly a year.

The unemployment rate fell to 4.3%, but partly because some Americans exited the labor force. The labor force participation rate fell to 61.9%, the lowest level since 2021. Participation also declined among the core working-age population aged 25 to 54. The number of people working part-time for economic reasons increased.

Economists are also closely watching how changes in labor supply and demand affect wage growth, especially as inflation risks heat up again. The report showed that average hourly earnings rose 0.2% month over month and 3.5% year over year, the lowest pace in nearly five years. This could pose challenges for consumers facing soaring energy prices.

The employment survey reflects conditions from the second week of March, shortly after the Iran war broke out on February 28. Economists expect that if the conflict continues, the war will have a greater impact on future employment data, because companies may delay hiring or layoffs due to higher energy prices and potentially weaker demand.

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责任编辑：江学思