Steady March jobs report gives Federal Reserve time to balance risks

Federal Reserve Bank of San Francisco president Mary Daly discussed the March jobs report and the potential inflation implications of the Iran conflict in an interview with Maria Bartiromo on Wall Street. The discussion came after President Donald Trump highlighted what he described as an unexpectedly strong jobs gain for March following job losses in February.

March jobs report: headline gains and labor market details

The U.S. added 178,000 jobs in March, according to the Bureau of Labor Statistics. The figure includes 8,000 government job losses. Trump said the March private-sector job gains totaled 186,000.

The March employment increase was about three times the level most economists forecast, following a loss of 133,000 jobs in February.

Unemployment fell from 4.4% in February to 4.3% in March. The percentage of adults in the labor force dipped to 61.9%, the lowest since November 2021.

Revisions to prior months

Revisions were made to payroll numbers for January and February. January was revised up by 34,000 jobs, changing from a gain of 126,000 to 160,000. February was revised down by 41,000 jobs, changing from a loss of 92,000 to 133,000.

Taken together, employment in January and February was 7,000 jobs lower than previously reported.

Trump’s interpretation and sector performance

Trump credited his economic policies for the positive March jobs report, adding that factory construction jobs were rising due to onshoring and surging investment tied to tariffs. He also said the trade deficit had shrunk by 52% over the past year.

In terms of sector performance, the health care sector led March job gains, adding 76,400 jobs after the end of a Kaiser Permanente strike in February and the return of employees to work.

Wages, inflation context, and Federal Reserve timing

Average hourly earnings rose 3.5% from a year ago. The increase was described as providing consumers with enough buying power to offset persistent inflation concerns.

Thomas Simons, chief U.S. economist with Jefferies, said it was not clear how the war in Iran would affect job numbers going forward, noting that the March data is mostly backward-looking and may not fully reflect the new conflict or the recent rise in energy prices and other related risks.

Another assessment cited in the discussion was that the latest jobs data did little to change market expectations that the Federal Reserve is likely to keep interest rates unchanged for the foreseeable future, while also giving the Fed more time to wait for inflation to decelerate before taking action.

Market and reporting contributions

Fox Business' Eric Revell and The Associated Press contributed to the report.