U.S. employment growth snapped back in March after a hefty decline in February, and the jobless rate declined unexpectedly to 4.3%, but economists found the headline highlights were countered by a number of less-than-glowing details.
Here are three highs and lows from the report.
Highs:
1) JOB GAINS LARGEST SINCE DECEMBER 2024
A big plus was that employment growth was fairly broad-based. The Bureau of Labor Statistics diffusion index measuring the breadth of rising employment across industries was the highest since December 2023.
The healthcare sector continues to account for the largest share of gains, but other sectors like construction and leisure and hospitality saw nice boucebacks in March after bad weather hampered them in February.
2) MANUFACTURING JOB GAINS LARGEST SINCE NOVEMBER 2023
This will be a long-awaited bragging point for President Donald Trump, who has touted many of his economic policies such as import tariffs as being key to reviving a moribund factory employment scene. The increase was the second in three months, but just the third monthly gain in more than two years. Total factory employment remains below the level when Trump returned to office in January 2025.
3) JOBLESS RATE TICKS DOWN, INCLUDING FOR MINORITIES
The unemployment rate declined unexpectedly by a tenth of a percentage point, and remains at an historically low level overall.
On top of that, joblessness fell for all racial and ethnic groups, something that hadn’t happened in unison since December 2024. The unemployment rate declined for minorities more than for whites, although the overall rate for whites remains lower than for Blacks, Hispanics and Asians.
Lows:
1) A DECLINING WORKFORCE
The US labor force shrank for the third time in four months and is now the lowest of Trump’s second presidency. Nearly 1.5 million people have left the workforce in the past four months, a result economists say of Trump’s tough immigration policies that have limited the numbers of foreign-born workers and of natural demographic forces such as an aging population that is leading to a long-term retirement wave.
2) TOUGH TIME FOR YOUNG WORKERS
It is proving to be one of the leanest job markets for new college graduates in years, in part because of the widening use of artificial intelligence tools to do many of the entry-level tasks that young workers traditionally had performed.
Since just before the COVID-19 pandemic, the participation rate among workers aged 20 to 24 has dropped more than any other key working-age group other than those over 55, who are leaving largely for retirement.
3) PAY GAINS LOWEST IN NEARLY 5 YEARS
Average hourly earnings rose marginally in March, as the overarching trend of slack demand for labor undercuts workers’ leverage in seeking better pay.
The 0.2% increase from the month before is likely to be outmatched by inflation when the March Consumer Price Index data is released later in April, thanks to the jump in gasoline prices since the U.S. and Israel launched attacks on Iran. The 3.5% annual rise in hourly wages was the smallest in nearly five years.
(Reporting by Dan Burns; Editing by Mark Porter)
