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US: Employment Situation
| Consensus | Consensus Range | Actual | Previous | Revised | |
| Nonfarm Payrolls - M/M | 51,000 | -25,000 to 75,000 | 178,000 | -92,000 | -133,000 |
| Unemployment Rate | 4.4% | 4.4% to 4.5% | 4.3% | 4.4% | |
| Private Payrolls - M/M | 56,000 | 30,000 to 70,000 | 186,000 | -86,000 | -129,000 |
| Manufacturing Payrolls - M/M | 15,000 | -12,000 | -6,000 | ||
| Participation Rate | 61.9% | 62.0% | |||
| Average Hourly Earnings - M/M | 0.3% | 0.2% to 0.4% | 0.2% | 0.4% | |
| Average Hourly Earnings - Y/Y | 3.8% | 3.6% to 3.8% | 3.5% | 3.8% | |
| Average Workweek | 34.3hrs | 34.3hrs to 34.3hrs | 34.2hrs | 34.3hrs |
Highlights
Odds of several interest rate cuts by the Federal Reserve this year remain low following a March jobs report that exceeded expectations. However, sharp revisions to February and January payroll numbers now collectively lower compared to what previously reported and a slowdown in the pace of average hourly earnings will raise additional concerns about the overall health of the labor market.
The U.S. economy added 178,000 jobs in March, compared to expectations for +51,000 in the Econoday survey of forecasters. The unemployment rate ticked down to 4.3 percent, below expectations for 4.4 percent.
February's nonfarm payroll employment was revised down from -92,000 to -133,000, and the change for January was revised up from +126,000 to +160,000. With these revisions, employment in January and February combined is 7,000 lower than previously reported.
Private service-sector jobs grew by 186,000 after contracting by 129,000 in February.
Federal government employment shrank by 18,000 in March, and is down 355,000 or 11.8 percent, since its peak in October 2024. Federal employees on furlough during the partial government shutdown were counted as employed in the establishment survey because they worked or received (or will receive) pay for the pay period that included the 12th of the month, the BLS said.
The labor-force participation rate dipped to 61.9 percent from 62.0 percent in February. The rate was 62.5 percent for the same month a year ago.
Job increases occurred in healthcare (reflecting the end of strike activity), construction, and in transportation & warehousing.
There was a rebound the manufacturing payrolls, up 15,000 to erase the decline by 6,000 in February. Meanwhile, in what reflects a bounce-back in activity following severe winter weather to start 2026, construction added 26,000 jobs last month after cutting 13,000 in January.
Average hourly earnings are up 0.2 percent in March, compared to +0.4 percent in February. Wages are up 3.5 percent compared to a year ago.
Market Consensus Before Announcement
Payrolls seen back up by 51K after a surprise drop of 92K in February. Jobless rate expected flat at 4.4 percent in March versus 4.4 percent in February. Earnings growth expected at 0.3 percent, down from 0.4 percent in February.
Definition
The most closely watched of all economic indicators, the employment situation is a set of monthly labor market indicators based on two separate reports: the establishment survey which tracks 650,000 worksites and offers the nonfarm payroll and average hourly earnings headlines and the household survey which interviews 60,000 households and generates the unemployment rate.
Nonfarm payrolls track the number of part-time and full-time employees in both business and government. Average hourly earnings track employee pay while the average workweek, also part of the establishment survey, tracks the number of hours worked. The report's private payroll measure excludes government workers.
The unemployment rate measures the number of unemployed as a percentage of the labor force. In order to be counted as unemployed, one must be actively looking for work. Other commonly known data from the household survey include the labor supply and discouraged workers.
Description
If ever there was an economic report that can move the markets, this is it! The anticipation on Wall Street each month is palpable, the reactions can be dramatic, and the information for investors is invaluable. By digging just a little deeper than the headline unemployment rate, investors can take more strategic control of their portfolio and even take advantage of unique investment opportunities that often arise in the days surrounding this report.
The employment data give the most comprehensive report on how many people are looking for jobs, how many have them, what they're getting paid and how many hours they are working. These numbers are the best way to gauge the current state as well as the future direction of the economy. Nonfarm payrolls are categorized by sectors. This sector data can go a long way in helping investors determine in which economic sectors they intend to invest.
The employment statistics also provide insight on wage trends, and wage inflation is high on the list of opponents of easy monetary policy. Fed officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Fed to maintain a more accommodative monetary policy. If inflation is a problem, the Fed is limited in providing economic stimulus.
By tracking the jobs data, investors can sense the degree of tightness in the job market. If wage inflation threatens, it's a good bet that interest rates will rise; bond and stock prices will fall. No doubt that the only investors in a good mood will be the ones who watched the employment report and adjusted their portfolios to anticipate these events. In contrast, when job growth is slow or negative, then interest rates are likely to decline - boosting up bond and stock prices in the process.
Importance
The employment situation is the primary monthly indicator of aggregate economic activity because it encompasses all major sectors of the economy. It is comprehensive and available early in the month. Many other economic indicators are dependent upon its information. It not only reveals information about the labor market, but about income and production as well. In short, it provides clues about other economic indicators reported for the month and plays a big role in influencing financial market psychology during the month. Additionally, the Fed has made 6.5 percent unemployment a threshold for considering changes in policy - both for quantitative easing and the fed funds rate. And the Fed has emphasized that it is overall labor market conditions that matter - not just a specific number.
Interpretation
The bond market will rally (fall) when the employment situation shows weakness (strength). The equity market often rallies with the bond market on weak data because low interest rates are good for stocks. But sometimes the two markets move in opposite directions. After all, a healthy labor market should be favorable for the stock market because it supports economic growth and corporate profits. At the same time, bond traders are more concerned about the potential for inflationary pressures.
The unemployment rate rises during cyclical downturns and falls during periods of rapid economic growth. A rising unemployment rate is associated with a weak or contracting economy and declining interest rates. Conversely, a decreasing unemployment rate is associated with an expanding economy and potentially rising interest rates. The fear is that wages will accelerate if the unemployment rate becomes too low and workers are hard to find.
Nonfarm payroll employment indicates the current level of economic activity. Increases in nonfarm payrolls translate into earnings that workers will spend on goods and services in the economy. The greater the increase in employment, the faster is the total economic growth. When the economy is in the mature phase of an expansion, rapid increases in employment cause fears of inflationary pressures if rapid demand for goods and services cannot be met by current production.
When the average workweek trends up, it supports production gains in the current period and portends additional employment increases. When the average workweek is in a declining mode, it probably is signaling a potential slowdown in employment growth-or even outright declines in employment in case of recession.
Gains in average hourly earnings represent wage pressures. It is worth noting that these figures aren't adjusted for overtime pay or shifts in the composition of the workforce, which affects wages on its own. Market participants believe that a rising trend in hourly earnings will lead to higher inflation. But if increased wages are matched by productivity gains, producers likely will not increase product prices with wages because their unit labor costs are stable.
