Kiplinger Jobs Outlook: March Jobs Surge Should Dismiss Concerns
March report reversed job losses in February due to weather and a strike, and appears to set the economy on an upward trend.
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178,000 jobs were added in March, exceeding analysts’ expectations. Part of the surge was the reversal of the jobs decline in February because of bad weather and a strike by 31,000 health care workers. Jobs numbers have seesawed since January. When the first three months of the year are combined, they average 68,000 per month. That amount indicates healthy employment growth for an economy that is experiencing slow labor-force growth.
Gains were widespread in March. Private employment rose an even stronger 186,000. Health care and social assistance was back to its usual strong hiring, adding 90,000. Leisure and hospitality added 44,000. Other hires included 26,000 in construction, 20,000 delivery drivers, 15,000 in durable goods manufacturing and 10,000 in retail. The only notable private-sector weaknesses were a loss of 13,000 computer-related jobs, a decline of 9,000 in banking and 6,000 in insurance. Government was a mixed bag, as federal government payrolls dropped 18,000, and state government, 4,000, but local government was a positive 14,000.
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The unemployment rate declined to 4.3%, and nearly to 4.2%. The number of unemployed has declined in three of the last four months. The reason for the declines is not clear yet, but may be partly the result of a decline in voluntary quits. The number of people forced to work part-time because of slack business conditions rose only slightly in March, after a large decline in February.
Growth in average hourly earnings eased to 3.5% over the past 12 months, and to 3.4% for production workers (blue-collar and non-administrative employees). Wage growth has been expected to slow because of a low rate of hiring, but this is the first time a significant downward move has been seen. More data will be needed to confirm if this is a trend or a one-time blip. This does bring growth in average hourly earnings closer to that of the more accurate quarterly Employment Cost Index, which showed 3.3% wage growth for all of 2025.
The robust March jobs report should dissipate concerns at the Federal Reserve that the economy might be weakening. That means that rate cuts are off the table for the moment, at least until a new Fed chair takes over, possibly in May.
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