US adds a whopping 178,000 jobs in March, bouncing back from a dismal February

One reason for the drop in the unemployment rate is people leaving the workforce. Labor force participation rate fell to 61.9% from 62%, a rate last seen in November 2021.

The healthcare sector added 76,400 jobs in March. The leisure and hospitality sector and construction also added jobs over the month.

The government sector continued to lose strength, with 8,000 jobs lost on net. Information and financial activities, two white-collar sectors, lost jobs, but professional and business services had a little bit of job creation.

Average hourly earnings rose 3.5% over the year in March, missing the expected 3.7% and short of previous gains.

"There haven't been a lot of signs that indicate that there's substantial upward movement in wages upon closer examination," Mark Hamrick, senior economic analyst at Bankrate, said prior to the new jobs report. "The irony there is that of the inability of workers to capture substantially higher wages may be one of the things that helps to keep inflation in the United States somewhat constrained."

Revisions show that February was worse than previously thought, while January had a stronger gain than previously reported. February's job loss of 92,000 was revised to a decline of 133,000, and January's gain of 126,000 was revised to an increase of 160,000.

The economy added 178,000 jobs in March, exceeding the 65,000 expected, and comes after a major loss in February. Unemployment fell from 4.4% to 4.3%. The rate has been low but at least 4% for almost two years.

April 2 marked a year since Liberation Day, when President Donald Trump announced sweeping tariffs. There's been a lot of back-and-forth since, including a Supreme Court decision overturning most of the tariffs announced by the administration.

Despite the whiplash, the macroeconomic effects of the tariffs on jobs and prices have been relatively muted. The Budget Lab at Yale said in a post that "there is no definitive indication of any effect of tariffs on the aggregate job market" and added, "there are some indications of weakness in tariff-exposed employment overall, but not in the manufacturing sector."

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The healthcare sector has been pretty strong, despite the dip in February, its first loss since April 2025. Long-term, the sector will need people as the population ages and people retire.

"The only major sector that's really adding jobs is in the healthcare industry, which I mean, a lot of those are good jobs," Claudia Sahm, chief economist for New Century Advisors, said. "That's not a problem except that's telling us that we just don't have a lot of breadth in terms of job creation."

"This looks like a job market that's slowly losing steam or slowly cooling, not a job market that is falling off a cliff, which I think is sort of what a recession would look like," economist Guy Berger said. He's among the several economists Business Insider talked to who said the US isn't in a recession. Mark Hamrick, senior economic analyst at Bankrate, said the likelihood of entering one has increased since the start of the Iran war, but agrees the US isn't in a recession.

Meanwhile, NerdWallet's senior economist Elizabeth Renter said some data has been concerning over the past year, including consumer sentiment and some months of job losses amid the low-hire, low-fire job market.

"The longer that this conflict goes on in Iran, the more likely it is that we will face a recession this year," Renter said.

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US stock futures were largely unchanged, with S&P e-minis down just a hair overnight. That followed a relatively quiet Thursday for the S&P 500, closing up about 0.1% on the day.

Oil markets have continued their wild ride this week as the Iran war presses on, with the US benchmark West Texas Intermediate surging as much as 14% after President Donald Trump's Wednesday night address to the country.

Data published Tuesday showed job openings once again dropped below 7 million in February after a brief tick up the previous month. There were 0.9 job openings per unemployed person in February, meaning there were more people unemployed than work opportunities.

"Weakness was broad-based, with leisure & hospitality, manufacturing, wholesale trade, and education & health services leading the decrease in openings," Eugenio Alemán, the chief economist at Raymond James, said in commentary Tuesday. "While January saw a strong print last month, and there were upward revisions in today's report, February's decline in openings and hires reminds us that the path forward for the labor market recovery remains uneven."

The ongoing war in Iran has thrown oil markets into chaos for a month, and economists told Business Insider in March that this could translate into higher inflation in the next consumer price index report, which will be released next Friday. It might take some time to see the effects on job numbers.

"It's probably too soon for the energy shock stemming from the war in Iran to show up fully in the job market," Michael Madowitz, the principal economist at the think tank Roosevelt Institute, said in a blog post. "But the economy was already flashing warning signs before that shock hit: Through February, it had averaged almost no net job creation over the previous six months."

Population growth has been slowing as a result of demographic shifts and the Trump administration's strict immigration crackdowns, and that means the US doesn't need as many jobs to keep unemployment steady. Economist Guy Berger said if the economy added between 20,000 and 50,000 jobs in March, that could be enough for an OK report.

"A good part of the slowing in the pace of job growth over the past year reflects a decline in the growth of the labor force due to lower immigration and labor force participation, though labor demand has clearly softened as well," said Federal Reserve Chair Jerome Powell at a press conference on March 18.