U.S. job growth surged past expectations in March and the unemployment rate dropped, giving President Donald Trump some breathing room as the economy comes under increasing pressure over the war in Iran and rising oil prices.
Companies added a net 178,000 jobs last month, the Labor Department reported Friday, a huge swing from February, when the economy actually shed jobs. But it was roughly in line with January — a sharp fluctuation that is making it hard to gauge the job market’s health. But the overall positive trend suggests that the economy remained resilient during the first quarter of the year.
Guy Berger, a senior fellow at the Burning Glass Institute, called it an “incredible zig-zagging employment situation.” He added, “you have to average out all these jobs reports. But the average looks pretty good.”
The numbers for January were revised up to 160,000 jobs added, compared to the 126,000 previously reported, while February was revised down to 133,000 jobs lost, compared to the initially reported 92,000 loss.
None of those figures are likely to change the narrative that has prevailed over the past couple of years of a low-hire, low-fire labor market. But the unemployment rate now stands at 4.3 percent, and the manufacturing sector — which has been anemic for a long time — added 15,000 jobs in March, the highest number since November 2023.
That gives Trump some useful talking points as polling shows deep dissatisfaction with the state of the economy, particularly in the wake of the war in the Middle East, which has led to a surge in gas prices. Manufacturers have shed jobs over the past year, despite Trump’s efforts to boost the sector through tariffs, though activity has been expanding in recent months.
White House trade adviser Peter Navarro said the jobs report is “not the picture of an economy in retreat.”
“It is the picture of an economy that still has productive muscle, even after months of media warnings about tariffs, inflation, and looming recession,” he said. “Recall here that the February numbers were relatively weak. But a good part of that weakness was always likely to prove temporary, driven by weather distortions and strike effects. March confirmed exactly that, with hiring rebounding sharply as those temporary drags faded.”
One downside for Trump is that the good news on jobs is likely to reinforce Federal Reserve Chair Jerome Powell’s stance of holding interest rates steady while the central bank assesses the potential fallout from the Iran conflict, which could both push up inflation and slow growth. The president has called on Powell to lower rates “immediately.”
“The market is pricing in a 76 percent probability that the [Fed’s policy] rate is in its current range at the end of 2026, with small risks to both a higher and a lower fed funds rate at the end of this year,” PNC chief economist Gus Faucher said in a note on the report.
